Video and NGN Services Drive Router Sales in 2006

Carrier Ethernet Fastest Growing Segment

| Source: Synergy Research Group Synergy Research Group

RENO, NV -- (MARKET WIRE) -- February 15, 2007 -- According to a recently published report by Synergy Research Group, the Service Provider Router/Switch market continues to be driven by increased Service Provider spending on video and NGN services deployment. Carrier Ethernet equipment has benefited the most from this new round of investment representing 40.4 percent of Service Provider Router/Switch dollars spent in 2006, up from 27.8 percent in 2005.

In 2006, the impact of video has been most pronounced at the Core of Carrier IP Networks. Driven by the success of the CRS-1, Cisco grew its Core Router business over 30 percent in 2006 and regained over 7 market share points in the year. Juniper continues to be strongly positioned as the formidable Cisco alternative with nearly a third of the Core market in Q4 2006. 

        2006 Service Provider Router/Switch Market Share Rankings
        ---------------------------------------------------------
                         Position               Y-Y Growth
        Cisco               1                      +  31%
        Juniper             2                      -   2%
        Alcatel             3                      + 174%
        Redback             4                      +  78%
        Avici               5                      + 149%
        Foundry             6                      +  15%
        Tellabs             7                          0%

The Service Provider IP Edge has been transformed by the introduction of Broadcast TV, VOD, and IPVPN NexGen services. In a relatively short period of time, these new network demands have created a shift in market leadership among the equipment vendors. The most dramatic shift has been the fast rise of Alcatel, which grew its Router/Switch revenue 174 percent in 2006 and surpassed Juniper for the number two spot in the Edge Router/Switch market in Q4.

In the quarter, Redback had a significant increase in SmartEdge revenue, which enabled them to retake 4th place in the MultiService Edge segment from Tellabs.

To a lesser degree, Extreme, Foundry, and Force 10 have benefited from two trends -- Service Providers who have chosen a service overlay architecture for the metro aggregation portion of their networks and the growth of SANs in the outsourced data center. In 2006, their respective market shares in the Edge have remained in the low single digits.

About the Reports

Synergy's Q4 2006 Enterprise and Service Provider Router/Switch Market Share reports are available for purchase at www.srgresearch.com or by contacting Heather Wilson at 775-852-3330. Synergy provides separate Market Share and Forecast reports for Worldwide, U.S., EMEA, APAC, and LATAM regions.

About Synergy Research Group

Synergy Research Group is a highly respected source for networking and telecom market research by Wall Street firms, leading equipment vendors, and government institutions. Synergy can be found at www.srgresearch.com.

The contents of this press release represent SRG's interpretation and analysis of statistics and information collected from authorized company representatives, industry sources, and SRG estimates. SRG does not guarantee the accuracy or completeness of the statistics or information contained in this release.

Contact Information: Contact: Heather Wilson (775) 852-3330 Email Contact

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