Cisco Systems Inc. (CSCO - Analyst Report) announced that it has been selected by the Australian unit of Vodafone Hutchison (VOD - Analyst Report) to supply its ASR 5500 mobile multimedia platform when Vodafone deploys its 4G long-term evolution (LTE) network.
Cisco’s ASR 5500 mobile multimedia platform has the ability to simplify capacity while managing traffic efficiently. It also comes with proactive, predictive monitoring and management capabilities. The platform bridges the gap between mobile telecommunication providers and customers. Thus, Vodafone will benefit from Cisco’s expertise in network efficiency which in turn will help it to successfully offer 4G benefits to its customers in Australia.
LTE technology is capable of delivering mobile Internet speeds that are up to 10 times faster than 3G connections thus, allowing customers to stream, download and upload games more efficiently. It has a quicker response and processing time as well. It supports applications such as Internet Protocol (IP) telephony, mobile web access, gaming services, 3D television, high-definition (HD) mobile TV, video conferencing and cloud computing. It uses the spectrum more efficiently than other technologies, creating more space to carry data traffic and services that can ultimately deliver a better network experience to the users.
According to Strategy Analytics, LTE network connections may reach 322 million in 2013 and 1.6 billion by 2017. Further, another report by Juniper Research suggests that 4G LTE revenues may reach $340.0 billion by 2017 worldwide.
Thus, rapid adoption of LTE technology worldwide, strengthened by the rise in smart devices, is compelling network carriers to prioritize technology upgrades as slow Internet speed could increase customer churn. This might prove beneficial for Cisco, given its product portfolio and broad reach across geographies.
Cisco’s revenues in the second quarter of fiscal 2013 increased 5.2% year over year and 1.7% sequentially to $12.1 billion. Products (78.0% of total revenue) were up 3.3% year over year to $9.4 billion. Services (22.0% of total revenue) jumped 12.5% year over year to $2.7 billion.
Cisco carries a Zacks Rank #4 (Sell). Other stocks that are equally worth considering include STMicroelectronics NV (STM - Snapshot Report), Magnachip Semiconductor Corp. and Lam Research Corp. (LRCX - Snapshot Report), all carrying a Zacks Rank #2 (Buy).