Mobile equipment makers seeking robust growth from huge demand

The explosive growth in mobile data demands and the fast-developing cloud computing industry in China are likely to create rich opportunities for worldwide network equipment makers, company officials said.

Mobile devices on show at the pavilion of Huawei Technologies Co at PT/EXPO COMM CHINA 2012 in Beijing. China's trend of going mobile and its demand for more cloud-based services have helped many network equipment companies to maintain robust development. [Photo/China Daily]

The gloomy global economy, presented by the faltering US recovery and a weak Europe, has hurt network equipment makers as their biggest customers, telecom service providers, cut spending and delayed the purchase of new equipment.

China's economy slowed down as well, with the country's GDP growth hitting a three-year low of 7.4 percent in the third quarter. However, China's trend of going mobile and its demand for more cloud-based services have helped many network equipment companies to maintain robust development.

Douglas Murray, senior vice-president for Asia-Pacific at Juniper Networks Inc, a US-based network equipment vendor, said China is at the top of Juniper Networks' list and is an important market. "Over the last three years, Juniper has put tremendous resources and investment in China. That's a trend that will certainly continue," he said.

Murray said Juniper Networks had a pretty good performance in the Chinese market in the first half of this year, especially in the enterprise business, where the company achieved double-digit growth.

Overall, Juniper Networks' global revenue was down by 4 percent to $1.07 billion for the three months that ended in June. In the Asia-Pacific market, its revenue slid 12 percent year-on-year during the second quarter, according to a ZDNet Asia report.

The key reasons why there was a drop in Juniper's Asia-Pacific revenue were due to a lackluster performance in India in the first half, where competition and the political environment was tough, the report said.

"We definitely see a great deal of opportunities in China," said Murray.

China had the world's largest mobile phone population of 1.07 billion as of August. The number of the country's 3G network service subscribers is approaching 200 million, according to statistics from the Ministry of Industry and Information Technology.

Given an increasing mobile population and smartphone penetration rate, the mobile data traffic has experienced an explosive growth in the country. "Everything goes to mobility. That creates diversified service demands and the industry needs innovative technologies to meet the demands," Murray said.

Juniper Networks currently has 500 employees in China. The company entered the market in 2000. It provides products and services for telecom operators, financial service organizations and companies in education and healthcare industries.

The research firm Gartner expects IT spending in China to reach $312 billion this year, up 12.6 percent from $277 billion in 2011. China's growth rate is much faster than that of average worldwide IT spending, with the latter expected to stand at about 3 percent this year, according to Gartner.

However, on the other hand, Murray at Juniper Networks said it is a necessary to build up a trusted mobile system for future society. According to a Trusted Mobility Index issued by Juniper Networks, it found the vast majority of people are using mobile technology today that they do not necessarily trust. Just 16 percent of respondents in China have a great deal of confidence in the security of their mobile devices and services, while 20 percent have little or no confidence, the report said.

This lack of confidence could be due to the security threats already faced by customer respondents, which is highest in China. About 74 percent of them have been the victims of at least one security breach, versus the global average of 48 percent, the report pointed out.

"Building trust in mobility is just as important as building great networks and powerful applications," said Dan Hoffman, the chief mobile security evangelist at Juniper Networks. "Creating a safer and more trusted mobile experience requires a sustained, collective effort by mobile service providers, device makers, software developers, networking companies and security experts."

shenjingting@chinadaily.com.cn