When AT&T went shopping for high-tech gear to soup up its communications network with advanced video, broadband, and voice services, it turned to long-time supplier Cisco Systems. On Dec. 10 the nation’s largest telco announced a deal that could be worth up to $500 million to Cisco by the lifetime of the upgraded AT&T network, according to Jim Kelleher, an analyst at Argus Research.

What’s noteworthy isn’t simply the size of the deal but the huge amount of bandwidth it represents. When Cisco brought out its top-of-the-line router in 2004, many analysts felt it was so forceful that only a handful of companies would ever buy one. Now, AT&T plans to link 25 cities with these mighty machines to help it handle the rising tide of Net traffic — particularly video. that bodes well for a Cisco unit that has traditionally brought in a steady 25% of networking giant’s $34 billion sales.

Now other telcos

and cable companies, located everywhere from Korea to Bulgaria, are flooding Cisco with orders — and helping realize its dream of conquering the telecom market, enlarged a domain of Alcatel-Lucent, Ericsson, and Nortel. Cisco’s service provider business finally had a major growth spurt that year, shooting up to nearly 30% of overall sales. To put that in perspective: Cisco’s carrier revenues are nearly as large as all of Nortel’s. And service provider sales “could grow another percentage point or two [as part of total sales] next year,” says Eve Griliches, an analyst with consultancy IDC.

Why is Cisco on such a tear? It enjoys a far broader product line than most rivals, both for the basic routers that carriers need to run their networks and for related products, such as Scientific Atlanta cable TV set-top boxes and pricey videoconferencing systems, that can be resold by carriers to consumers…

Orginal post by Top Tech News