February 23, 2010 / 10:00 PM / in 8 years

Juniper sees carrier capex recovery in 2010

*Cites analyst estimate of 12-15 pct rise in carrier spend

*Plans on more partnerships with tech companies

(Adds more CEO comments, background on products)

By Ritsuko Ando

NEW YORK, Feb 23 (Reuters) - Juniper Networks Inc’s (JNPR.N) CEO expects telecommunications carriers to step up capital spending in 2010 as new Web-surfing wireless devices force them to upgrade networks neglected during the downturn.

Kevin Johnson said an analyst’s forecast of 12 percent to 15 percent growth in global spending by telecoms service providers was consistent with what the company has heard from customers.

“That’s reflective of the view that traffic is continuing to grow. Service providers took a bit of a pause in spending in 2009 and now you’re seeing the resumption of the investment in capital to help carry that traffic, and certainly a big part of that is the mobile Internet,” Johnson said in a phone interview on Tuesday ahead of the company’s financial analyst meeting.

Juniper shares have gained little in recent months, despite stronger-than-expected results and outlook for two quarters, due to worries about slow spending by carriers and competition with larger rival Cisco Systems Inc (CSCO.O). [nN16246458]

But analysts expect a recovery this year as smartphones and netbook computers proliferate. They have led to exponential growth in mobile Internet traffic, putting pressure on carriers

-- Juniper’s main customer base -- to buy more advanced -- Juniper’s main customer base -- to buy more advanced telecoms equipment.

While many have said Juniper faces a major challenge from Cisco’s acquisition of wireless technology firm Starent, Johnson said the company’s products were competitive.

    He also said Juniper was planning to step up partnerships with other technology companies, including International Business Machines Corp (IBM.N), to expand its sales reach.

    Juniper has recently begun selling switches and other gear to corporate customers to diversify its business, and such deals are expected to play a key role in bolstering sales of products that include MX routers, EX switching products, and “Junos” operating system.

    “We’re going to continue to expand the relationships with our large strategic alliances and we’re going to continue to create a very broad ecosystem... around Junos,” Johnson said.

    Juniper shares closed down 1.14 percent at $26.90 on Tuesday, despite an announcement of a new stock buyback authorization of up to $1 billion.

    (Reporting by Ritsuko Ando, editing by Leslie Gevirtz)

    ((ritsuko.ando@thomsonreuters.com; +1 646 223 6084; Reuters Messaging: ritsuko.ando.reuters.com@reuters.net)) Keywords: JUNIPER/

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