3/16/2010 -- As Cisco Systems Inc. preps its next-generation Carrier Routing System-3 (CRS-3) for delivery, its share of the high-end carrier routing pie continues to shrink.

Cisco isn't alone. Arch-rival Juniper Networks Inc., which once combined with Cisco to control nearly 70 percent of the carrier equipment market, was also affected by the slide. Together, Cisco and Juniper now control slightly less than 60 percent of that segment. Both vendors have ceded share in the face of withering competition from Alcatel-Lucent, Huawei, and other players.

On the plus side, both Cisco and Juniper ceded market share while, at the same time, growing their overall revenues.

The carrier equipment segment had an extremely healthy fourth quarter of 2009: sales of IP edge and core routers (as well as carrier-grade Ethernet and ATM switches) increased by 17 percent during that period.

It's a trend experts say should continue this year.

That's according to the latest Service Provider Routers and Switches forecast report from market watcher Infonetics Research.

"The top two vendors in the service provider router space, Cisco and Juniper, together went from owning 69 percent of the worldwide router market in 2008 to 59 percent in 2009, while Alcatel-Lucent, Huawei, and others gained share," said Infonetics co-founder Michael Howard, in a prepared release.

While Cisco, Juniper, Alcatel-Lucent and Huawei remain the biggest and brawniest players in the carrier equipment space, at least one outside contender has emerged to challenge them. "Interestingly, smaller player Tellabs pushed past Ericsson in 2009, putting them in the top-five for the first time. Tellabs had an especially strong year based on their focus on the mobile sector," said Howard, who reiterated that the carrier equipment segment remains extremely healthy, overall. "All six of the top router vendors posted strong double-digit revenue increases in the fourth quarter, and we expect modest growth in the router segment to continue in 2010 as carriers carry out fixed-mobile convergence strategies for their router networks," he concluded. --By Stephen Swoyer