Verizon Picks Juniper to Revamp Network Core

Verizon (NYSE: VZ) is replacing the core of its network with new equipment from Juniper Networks (NYSE: JNPR). Specifically, the carrier will deploy Juniper’s latest PTX Series core routers in its fiber optic network, which feeds its FIOS fiber-to-the-home (FTTH) and fiber-to-the-premises (FTTP) services, along with the fiber-fed 5G metro Ultra Wideband service.

Juniper’s routers are expected to be deployed in 2023. The new equipment, much of which will be an upgrade of older Juniper wares, will support 400-Gb/s per port, allowing for a total network throughput of 115 Tb/s. The routers will be upgradeable to 800-Gb/s and single-terabit ports, enabling a future throughput of 230 Tb/s, Verizon said.

Verizon specifically named Juniper in its press release and cited a list of reasons for shifting to the new gear, including reduced footprint and power requirements; density and capacity; and, significantly, automation.

Verizon cites the PTX Series’ ability to automatically interface with other systems on the network, to adjust in real-time in response to analytics and telemetry, and to support segment routing, which streamlines networking and enables more efficient management.

5G Boosts Widespread Router Upgrades

Juniper’s score at Verizon signals an industrywide shift toward router replacement as fiber optic networking spreads in the advent of 5G. “Since the start of 5G roll-outs, investors have debated the chain reaction triggering upgrades to routing, and we see this deal as evidence the cycle has begun,” stated Raymond James analyst Simon Leopold in a note to investors.

In this announcement, Verizon mentions the dramatic growth of its metro-based Ultra Wideband 5G service, which indicates that the Juniper upgrade will take place in key cities where the high-speed, short-range wireless service has gained popularity.

Core Routing Heats Up

Juniper isn’t alone in being part of the routing renaissance brought on by 5G demand. Other vendors are seeing a similar uptick in routing and switching for core carrier and hyperscaler networks. Ciena (NYSE: CIEN), for instance, saw a 72% increase year-over-year in routing and switching revenue for its second quarter 2022.

Interestingly, Ciena wasn’t mentioned in the core networking press release, though Ciena was cited with Juniper as the central optical switching supplier to Verizon two years ago. A Verizon spokesperson said Ciena gear remains in the optical core, with Juniper upgrades taking place in the packet core. This is the case even though Ciena offers its own line of packet core products, as does Juniper.

Overlapping Functionality

The seeming overlap between Juniper and Ciena functionality illustrates the kind of equipment increasingly required by carriers and hyperscalers. What’s needed is a combination of optical networking with high-end routing functions and automated management.

By meeting these requirements, albeit with much variation, router and switch vendors Juniper and Ciena, along with Ericsson (Nasdaq: ERIC), Nokia (NYSE: NOK), and Arista (NYSE: ANET), to name a few, are pulling ahead in the routing and switching market while overlapping the functions that distinguished them from one another in the past. This will likely be an ongoing secular trend toward many interesting combinations of functionality in service of 5G.