Multiservice Switch and Router Installed Base

Bethesda MD, March 19, 2008 - According to DITTBERNER' s “Multiservice Switch and RouterInstalled Base” report, total router ports shipped to service providers has reached 9 Million. Cisco dominates the installed base with Juniper in second place. Huawei has the third largest number of installed router ports. Huawei is pulling away from Alcatel-Lucent even though both generated the same amount of revenue in 2007.

The report tracks shipments to over 1450 service providers and their subsidiaries worldwide. Equipment deployed is classified by core or edge, as well as router or switch. Multiservice ATM switch ports total 7.6 Million, with Alcatel-Lucent having the lead and Nortel coming in second. These Multiservice switch installed bases provide a good source of high-margin maintenance sales for Alcatel-Lucent and Nortel, as 4Q07 showed, but there is little chance of growth in ports deployed.

The same can be said for the router installed base potential maintenance sales with Cisco obviously having great possibilities just due to its presence in every IP network worldwide. The number of router ports is growing rapidly, and although Cisco' s share of the installed base will likely decrease, its CRS-1 router has kept it firmly in the lead in the core router segment and its new AS 1000 edge router will compete with Alcatel-Lucent' s and Ericsson' s edge routers. Huawei' s growth, largely through turn-key systems in emerging markets, increases its potential of add-on sales to its growing installed base. This provides the opportunity of improved margins. Huawei' s growth and Cisco' s defense of its installed base, is going to put a squeeze on other suppliers. The growth in IP networking sales due to broadband subscriber growth will be great, but this report shows where intensive mining of existing networks can provide a great number of maintenance and replacement sales possibilities for equipment vendors.