Cisco Systems (CSCO - Analyst Report) has enabled SingTel to deploy the next-generation high-speed global carrier Ethernet network called Multiprotocol Label Switching-Transport Profile (MPLS-TP) technology for its business customers.
Singapore-based Singapore Telecommunications Limited or SingTel is a public limited telecommunications company. It provides ISP (SingNet), IPTV, mobile phone (SingTel Mobile Singapore) and fixed line telephony services to its customers.
Backed by Cisco’s MPLS technology, SingTel can provide higher bandwidth and its business customers will now enjoy high-speed reliable Internet connection globally.
The MPLS-TP technology supports applications that require high bandwidth. In addition, demand for such applications is increasing and is evident from the surging popularity of IPTV or watching videos on hand-held devices.
While high bandwidth comes at a higher price, many service providers are changing their network to MPLS-TP so that they can provide services at a reasonable cost. Thus, we do sense a positive road ahead for this particular technology. This in turn may become positive for Cisco in the long term.
Much like Cisco, Juniper Networks (JNPR - Analyst Report) is actively deploying the MPLS-TP technology to provide its customers higher bandwidth at an affordable price.
According to Cisco’s own internal Visual Networking Index (VNI), the annual global IP traffic may reach 1.3 zettabytes by 2016. The growth will come from a rise in the number of devices (VNI predicts 18.9 billion network connections by 2016) and a rise in Internet users (VNI forecasts 3.4 billion Internet users by 2016).
Cisco’s revenue in the first quarter of fiscal 2013 increased 5.5% year over year to $11.69 billion and was better than management’s expectations (up 2-4%). Products (78.3% of total revenue) were up 3.9% year over year to $9.30 billion. Services (21.7% of total revenue) jumped 11.9% year over year to $2.58 billion.
Both Cisco and Juniper carry a Zacks Rank #2 (Buy).