Industry awaits Juniper response to Cisco/Starent

Cisco’s recent $2.9 billion acquisition of enhanced mobile packet core specialist Starent Networks was said by pundits to have harmed Juniper’s prospects in this market. Many said Juniper and Starent were getting closer, particularly in AT&T’s parlour, and the Juniper was to announce its affections for the company next week in New York.

Now that Cisco’s wooed Starent away with its billions, Juniper is left without a partner in the enhanced packet core segment of the 4G wireless market. CEO Kevin Johnson, however, says not to despair; the company is comfortable with its mobility strategy and product offerings — for now — and we’ll here more in the near future, presumably at the big new logo unveiling in New York. Johnson made these remarks this week during Juniper’s conference call with analysts on its Q3 results.

Johnson though, downplayed Juniper’s appetite for a big acquisition, in wireless or in any other market. In addition to Starent, the company’s been linked to Brocade and several other firms looking to sit at the main table in the data center.

One analyst is not reassured by Juniper’s reassurances. Catharine Trebnick of Avian Securities downgraded Juniper to negative from neutral, chiefly on the absence of a 4G enhanced packet core strategy, product offering and/or partner.

She notes that Juniper will face especially stiff competition from Cisco and the ASR9000 edge router, which she says Cisco is discounting aggressively:

Operators are focused on spending on the mobile infrastructure and carrier ethernet.  As we discussed previously, Juniper has been struggling with its mobile product core strategy. We believe this will inhibit its ability to compete at the 39 service providers who have announced plans for LTE with AT&T’s LTE EPC perhaps the most significant initial loss. Cisco is pushing their ASR9000 at very competitive prices. We expect that the initial sales effort will at least freeze the market as carriers evaluate the product’s new capabilities and more likely will cause ASP declines to accelerate as well as JNPR share loss in FY10. Juniper’s carrier business accounted for 63.6% of revenues in the most recent quarter, making these competitive issues particularly significant.

Pretty sobering stuff, considering Juniper just announced a third quarter that beat expectations and guided to an even better Q4. But it’s piqued our interest in just what Juniper has –or hasn’t — up its sleeve with mobility, specifically in the 4G packet core. With deals like Cisco/Starent and Tellabs purchase this week of backhaul specialist WiChorus, it’s getting time to show the cards…

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