Summary
Cisco has been struggling to get a real foothold in the next gen packet core for LTE.
iPhone traffic is stressing the packet core of AT&T.
Cisco needed a solution to stay in the game in AT&T for now and future and this move indeed solidified it.
Analysis
Cisco announced the acquisition of Starent Networks, a leading provider of next generation mobile packet core. Cisco has been struggling to develop a comprehensive strategy to maintain its footprint in the existing 2G/3G (especially AT&T's network with the tremendous growth of data traffic due to the launch of iPhone and its application). Also, Cisco has been losing out in the 4G core due to lack of a solid evolved packet core (EPC) and associated products and capabilities. With the solid footprint of Starent in Verizon Wireless, Cisco can now leverage that to win the AT&T business as well along with other major mobile operators, such as Vodafone.
Overall, this is a positive move by Cisco and a bad one for Juniper. The only remaining packet core vendor is WiChorus that has footprint in Clearwire, but nothing in the 3Gor 4G/LTE. The question is how Juniper is going to play out the EPC game and what move they would have to make to stay competitive.
This author consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
