Cisco Systems Inc. (CSCO - Analyst Report) announced that it’s ASR 5000 Series multimedia services platform has been selected by T-Mobile to manage T-Mobile’s mobile data traffic from its new long-term evolution (LTE) network and its 2G/3G networks in the Czech Republic.
Cisco’s ASR 5000 routing platform has the ability to optimize video transmissions while managing traffic efficiently. It is one unified platform that will help T-Mobile solve the complexities of the mobile network. The solution comes with predictive monitoring and a broader range of multimedia services and is expected to be implemented this year.
Thus, T-Mobile will benefit from Cisco’s expertise in network efficiency, which in turn will help itto enhance network speed and connectivity, reduce certain overhead costs and offer innovative services to its customers.
Cisco expects worldwide mobile data traffic to grow 13 times from 2012 to 2017 to a total annual volume of 134 exabytes in 2017, partly due to continued strong growth in the number of mobile Internet connections. Therefore, Internet speed will be a vital factor for the success of any telecom company.
The 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 technology, creating more space for data traffic and services that can ultimately deliver a better network experience to 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 $100.0 billion by 2014 worldwide.
Thus, the rapid adoption of LTE technology worldwide owing to the increasing use of 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 third-quarter fiscal 2013 revenues increased 5.2% year over year to $12.2 billion, driven by strength in data center and wireless businesses. Earnings of 48 cents were also higher than the Zacks Consensus Estimate on higher revenues and lower-than-expected operating expenses.
Cisco carries a Zacks Rank #4 (Sell). Stocks worth considering in the sector include Infinera Corp. (INFN - Snapshot Report), Silicom Ltd Ord and STMicroelectronics (STM - Snapshot Report), all carrying a Zacks Rank #2 (Buy).