LTE operator expected to install core, aggregation, backhaul routers
The opportunity for Cisco rival Juniper Networks in the network buildout at LightSquared could be more than $300 million, according to a bulletin issued this week from Avian Securities analyst Catharine Trebnick. LightSquared, the upstart 4G LTE wireless operator, will likely use Juniper routers for aggregation and core applications while Cisco’s role will be cell site backhaul and mobile core, Trebnick notes.
Trebnick did not speculate on the value of Cisco’s contract with LightSquared but said for backhaul alone, they could install 40,000 routers – one for each cell site tower – at a list price of $3,850. LightSquared won’t pay list of course, but the deal could be in excess of $100 million.
Juniper is being brought in through partner Nokia Siemens Networks, which announced an eight-year, $7 billion 4G LTE contract with the operator last October.
Avian estimates LightSquared’s capital spending will be $1.25 billion to $1.5 billion for 2011, with 30% to 40% earmarked for network equipment. The firm forecasts $100 million to be spent on Juniper MX series aggregation routers and another $100 million on T-series core routers over the life of the contract.
Avain also expects LightSquared to deploy Juniper’s SRX security gateways, and launch its service in nine midwest markets in 2011. Some markets may have service available this summer, Trebnick states.
As a result of the LightSquared momentum and some new opportunity at Verizon with the buildout of 30 to 40 cloud hubs, Avian is raising its estimates for Juniper. The firm now expects Juniper to record revenue of $4.8 billion for 2011 vs. $4.73 billion, with 18% annual growth. Wall Street also expects revenue of $4.73 billion for the year.
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