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Study: Routing in the sales

Demand for routers from telecommunications service providers ends 2002 on a high note, a Dataquest study says.

Sales of routers to telecommunications service providers ended 2002 on a high note, but still suggested only a small upswing in spending for the networking technology in the carrier market, according to a new study.

The worldwide market for service-provider routers (SPRs) rose to $1.9 billion last year as carriers such as AT&T, WorldCom and Verizon Communications used the devices to provide new telecommunications services and move to next-generation infrastructure, according to Gartner's Dataquest unit.

The study defines SPRs as carrier-class routers capable of providing multigigabit bandwidth to support high-speed WAN (wide area network) interfaces. These devices are typically designed to be installed in networking infrastructure and to support the Internet Protocol.

Core routers that provide backbone services got a boost from edge routers, which consolidate high-speed Internet traffic and provide IP services, since an increase of traffic at the edge eventually resulted in more bandwidth requirements in the backbone, according to the analysis.

In the fourth quarter of 2002, the worldwide SPR market reached $485 million, indicating that excess capacity may have been depleted and that carriers might resume spending in this market.

"Although the SPR market showed signs of leveling off at the end of 2002, the outlook for the market remains relatively flat in 2003," Jennifer Liscom, principal analyst for Gartner Dataquest's worldwide telecommunications and networking group, said in a statement. "Strong sales in edge and broadband aggregation routers will lead to recovery in the core, but recovery for the SPR market is still not expected until early 2004."

Cisco Systems and Juniper Networks accounted for the majority of all SPR revenue in 2002. Cisco led the market for the year, with 59.6 percent of worldwide SPR revenue, followed by Juniper with market share of 27.3 percent.

Cisco also led the market in terms of shipments, garnering 55.3 percent of the market. Juniper was in the No. 2 position with 28.7 percent of the market.