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The wireless RAN business is a tough one in margins and competition, and large vendors need to expand their activities in services and/or the core and backhaul portions of the network. With Cisco radically stepping up its carrier IP strategy and pushing its router-based approach to the core, the more traditional cellco suppliers are responding. Alcatel-Lucent has also beefed up its core router range, while Nokia Siemens is forming a joint venture with Cisco rival Juniper Networks, focused on carrier Ethernet.

The new deal expands on an earlier agreement to collaborate on Ethernet products, forming a full JV that will be based in The Netherlands and should open for business in the fourth quarter, assuming regulatory approval. Financial details were not disclosed.

The new entity will combine NSN access with Juniper's heavy duty routers and will sell a solution based on Juniper's MX Series of Ethernet routers, NSN's A-Series carrier Ethernet switches, and an end-to-end network management system. All this will be targeted at mobile backhaul, business and residential broadband, and the partners said it will be differentiated by low cost and improved network efficiency, so customers can get to market rapidly.

Ethernet is gaining ground rapidly for backhauling mobile data and voice and with the explosion of wireless data traffic, it is a rare area of healthy grown in the carrier market, especially as larger operators move towards implementing Ethernet/IP from end to end.

Kim Perdikou, general manager of Juniper's Infrastructure Products Group, said in a statement: "The combination of Nokia Siemens Networks' leadership in metro access and network management and Juniper's strength in Carrier Ethernet metro aggregation applications will enable our customers to more effectively monetize the network with new revenue generating services and lower transport costs."

The companies have a combined carrier Ethernet customer base of around 200 operators, in a sector that Infonetics estimates was worth $17bn in 2008 and should reach $32bn by 2013.

Also in the carrier infrastructure space, Huawei is reported to be interested in taking Nortel's stake in the LG-Nortel joint venture off its hands. The Chinese firm was previously said to be in talks for Nortel's Metro Ethernet unit, but these negotiations stalled, possibly amid US security concerns, and the Canadian vendor took the division off the table. The same sensitivities should not affect a deal for an international JV, provided LG sees a benefit to working with Huawei - advantages could include a new route into certain Chinese markets for LG devices.

Although LG-Nortel - in which the Canadian partner has control with 50% plus one share - had a tough quarter, it is considered one of the most attractive parts of the Nortel portfolio. Despite some former executives preparing a plan to bring Nortel out of bankruptcy protection virtually intact, break-up is still considered the most likely option by most analysts. Nortel said in a recent statement: "LG-Nortel is a profitable, standalone business with a strong balance sheet, and has not filed for creditor protection."

None of the three companies has commented on the reports.

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