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Carriers move to virtual routers; AT&T's business mobility push

In telecom news, virtual routers are increasingly popular for carrier services, while provider router and switch revenue was up 20% from last quarter.

This week in telecom news, an Infonetics Research survey found that more carriers are planning on moving their services to virtual routers as software-defined networking and network functions virtualization gain traction in carriers' routing strategies. Meanwhile, AT&T is refocusing its efforts on its business customers with a new division to support business mobility.

An Infonetics Research report found that global service provider router and switch revenue increased 20% from last quarter. The report found that Cisco, Alcatel-Lucent, Huawei and Juniper were the leading vendors.

Survey finds operators moving services to virtual routers; 100 GbE shift grows

In a change that affects the traditional router market and beyond, carriers are planning to move a variety of services, including security, VPNs and Quality of Service (QoS), to virtual routers running on commercial servers, Infonetics Research said last week. For the first time, Infonetics measured the importance of software-defined networking (SDN) and network functions virtualization (NFV) in its traditional routing strategies survey.

"The move to SDN and NFV will change the way operators make equipment purchasing decisions, placing a greater focus on software," Infonetics co-founder Michael Howard said in a statement, adding that while hardware will always be required, its functions will be refined as the service and operations agility is more driven by software.

Infonetics' Routing, IP Edge and Packet-Optical Strategies survey , which focuses on the global service provider market, also found that 15% of operators are already deploying or trialing NFV and another 59% are considering or evaluating it.

In terms of Ethernet, Infonetics' survey of 32 carriers from around the globe shows that only 4% of the router and Carrier Ethernet switch ports bought this year are 100 Gigabit Ethernet, but that percentage will grow to 19% by 2016. Carrier respondents also said they expect to pay "10 GbE parity" for 100 GbE ports by 2016, which means that a 100 GbE port will be priced at 10 times the cost of a 10 GbE port. -- Kate Gerwig

AT&T restructures for business mobility

AT&T is revamping its operations with a new division dedicated to mobility and business services, headed by Ralph de la Vega, former chief of AT&T's wireless unit.

Because business clients make up more than half of AT&T's mobile revenue, the new division will help AT&T's operations work more closely with business customers and help the provider better sell data, landline and wireless packages.

The move is also an attempt to lure business customers away from traditional telecommunications carriers with their wireless business services.

"They are simply making the case that the cornerstone of the enterprise sale is now wireless rather than wireline. It makes a ton of sense with the cable industry focusing more and more on the commercial segment," Craig Moffett, an analyst at MoffettNathanson LLC, told Reuters.

On ranking routers and the vendors who make them

While Infonetics Research last week released data from its global carrier market survey in terms of projections for the coming years, it also released its second quarter report on service provider routers and switches . Infonetics noted that the uptake in NFV and SDN technologies doesn't mean router and switch spending will tank. Given core router upgrades and necessary replacements for the move to 100 GbE, Infonetics Co-Founder and principal analyst for carrier networks Michael Howard said the core router market had 11% sequential growth in Q2 of this year.

Worldwide service provider router and switch revenue was up 20% to $3.9 billion in Q2 2014 over Q1 2014, but Howard noted in a statement that the long-term router trend is projected to decline by 4% from Q2 2013. Router and switch revenue includes IP edge, core routers and carrier Ethernet switches, all of which had double-digit revenue gains in Q2 2014.

With all of this good Q2 news for router and switch vendors, Infonetics said the usual suspects are making the sales: Cisco, Alcatel-Lucent, Huawei Technologies Co Ltd. and Juniper Networks Inc.

In yet another survey on router and switch vendor leadership among global service providers, Cisco ranked as the top router and Carrier Ethernet switch vendor with 90% of respondents listing Cisco in the top three manufacturers. Juniper, Alcatel-Lucent and Huawei followed when carriers listed their favorites. The most important vendor criteria were product reliability, value, and service and support. The second tier of vendors rated by service providers included Ciena Corp., Ericsson, Tellabs Inc., ZTE Corp., ADTRAN Inc. and Overture Networks. -- Kate Gerwig

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