UPDATE 1-Juniper expects to beat mkt growth in 2011

* Juniper sees addressable mkt growing “mid-teens” in 2011

* Juniper expects consolidation to continue in teleco gear
* Telecom operators capex to be largely flat in 2011, 2012

(Adds quotes, )

By Leila Abboud and Marie Mawad

PARIS, Oct 27 (BestGrowthStock) – Juniper Networks (JNPR.N: ) said
its focus on high-end technology will allow it to grow faster
than rivals as big telecom operators to keep their spending on
network gear largely flat in the next few years.

Executive vice-president Stefan Dykerhoff said in an
interview on the sidelines of the Broadband World Forum, that
Juniper’s focus on products that help operators cope with a boom
in data on fixed and mobile networks meant it had a bright
future despite intense competition in the telecom gear industry.

Dykerhoff added that telecom operators were emerging from
their retrenchment during the economic downturn and that sales
were especially strong in the U.S and Asia.

“Throughout the crisis, everything was about trying not to
spend the next dollar, the next euro. Our service provider
customers have started thinking a lot more about the future
again, the next 5-10 years. We think that’s a sign of recovery.”

Juniper, which competes with larger rival Cisco Systems Inc.
(CSCO.O: ) and Alcatel-Lucent (ALUA.PA: ), has grown rapidly in
recent years by making routers and switches that help telecom
operators cope with a boom in data on networks.

Such technology has been a profitable niche in an otherwise
brutal competitive environment for telecom gear, which has seen
players like Alcatel-Lucent and Nokia-Siemens Networks (NSN.UL: )
struggle to turn a profit in the face of stiff competition from
Chinese vendors like Huawei [HWT.UL].

“We expect telecom operator capex to be essentially be flat,
slightly up or slightly down in the next few years,” he said.

“But we’ll see our addressable market grow, because more of
their spending is coming in IP networking, and we’re taking
market share.”

Dykerhoff added that Juniper’s addressable market — the
market for the products it makes — would grow in the
“mid-teens” range next year, which he defined as 12-18 percent,
and that Juniper expected to grow faster than the market.

“All the big incumbent telecom carriers need to deal with
the problem of legacy equipment that pushes up their cost of
operating networks,” he said.

“When they look at how to simplify the network, that’s
fundamentally good for us.”

He said no official financial guidance had been set yet for
next year.

Investors often cite Juniper as a takeover target for a
larger rival such as Cisco, or one of its strategic partners
such as Ericsson [ERCIb.ST>, Nokia-Siemens Networks, Dell
(DELL.O: ) and Hewlett-Packard (HPQ.N: )P, all of which resell
Juniper’s products.

Dykerhoff said he didn’t see any need for Juniper to seek a
merger.

“As a company, our current market valuation is about $16.5
billion, so we are not exactly cheap. That’s because we’ve
delivered a lot of profit and a lot of growth,” he said.

“If you are a small company in this environment struggling
to be profitable and generate growth then you have to look at
those options. But we have neither of those problems. So the
incentives for us or for our partners to change that environment
are not really there.”

But Dykerhoff did not rule out that more consolidation would
come to the telecom gear sector because intense competition with
the Chinese meant that there was simply not enough room for five
large vendors as there are today. “I do think there will be more
consolidation particularly among vendors with a lot of legacy
businesses, trying to get economies of scale,” he said.

Juniper recently reported third quarter revenue which
slightly missed Wall Street’s expectations but gave an upbeat
outlook for the current quarter. [ID:nN191158128].

Juniper shares were down 1.02 percent to $32.05 per share on
Wednesday.
(Reporting by Leila Abboud and Marie Mawad; Editing by Louise
Heavens)

UPDATE 1-Juniper expects to beat mkt growth in 2011