LuLa Bad News for Juniper?

Lucent (LU) and Alcatel (ALA) merger might just ruin Juniper’s Monday (and days to follow) according to some analysts. Lucent has been a major OEM partner for Juniper, and has been selling a lot of routers for the #2 router maker. Lucent helped Juniper win contracts at China Telecom, Sprint, Vodaphone Australia and KPN in the Netherlands.
Lucent now accounts for about 8% of total Juniper sales, according to Mark Sue of RBC Capital Markets. That is at risk he says, and in a note to his clients writes, “With the availability of Alcatel’s routers however we believe Lucent is increasingly likely to promote Alcatel’s routers versus Juniper’s routers. Alcatel’s family of routers has thus far won significant customers both here and abroad.”
Ovum-RHK had reported that Alcatel router revenues were up 45% in 2005. So what will Juniper do? If you believe this report, Juniper might actually go out and buy Huawei-3Com combo. Given that the report emerged out of China, I am not putting too much credence in it – at least for now.
PS: Going forward, I am referring the combo Lucent-Alcatel as LuLa (LU+ALA).
PS2: Check out the transcript of LULA announcement here.