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The explosion of data traffic carried over wireless networks, and the move to Ethernet/IP, are making the carrier edge router segment increasingly appealing, and Alcatel-Lucent is making a major play to challenge Cisco and Juniper with its own IP router-based approach.

The French giant, like Cisco, is upgrading its gear to cope with exabyte levels of traffic across wired, wireless and converged networks, and is looking particularly strong in its EMEA heartland and among carriers offering residential services - while Cisco, predictably, remains dominant in enterprise focused markets. ALU is a firm believer that the core network will move away from specialized boxes towards a more generic IP router approach and its latest announcement is of 100Gbps Ethernet interfaces for its edge gear, which will ship next summer.

Juniper, which formed a carrier Ethernet joint venture with Nokia Siemens in June, will make 100Gbps Ethernet available in edge routers this year, having already done this for core routers. This is just one area where vendors are developing commercial products well ahead of official standards in response to urgent operator demand - the IEEE should finalize 100-GigE standards next summer at the earliest.

Over the past four quarters, ALU has surpassed Juniper in the edge market, according to Ovum-RHK, winning 18% of the market, against its rival's 16%, and seizing 20% in Q109. Cisco still has a massive 42% share, though Ovum claims it is losing ground. ALU entered the space five years ago and now gets 8% of its revenues from edge routers, and aims to use the 100Gbps product to break into the core router segment - this is worth less than the edge market ($2.4bn versus $4.5bn this year), and is even more dominated by Cisco and Juniper, which have 90% share between them. "You're likely to see Alcatel wedge themselves into certain parts of the core and then slowly chip away," Shin Umeda, an analyst at dell'Oro Group, told Dow Jones.

Cisco is pinning its differentiation plan firmly on video capacity. "When you look at the roadmap, we're 50% to 60% ahead of Alcatel in terms of capacity," said Suraj Shetty, VP of global service provider marketing. "When you look at features needed for video, we are even more ahead of our competition."

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