Juniper Networks Inc, the second-biggest maker of computer-networking equipment, forecasts its first-quarter profits will exceed some estimates as wireless carriers bought equipment to upgrade their networks. Juniper is benefiting from an upgrade cycle in the telecommunications industry as carriers rush to accommodate a surge in data use by smartphone and tablet customers. [Photo / China Daily]

Network gear vendor predicts growth as Web traffic increases at rapid rate

The US-based network equipment vendor Juniper Networks sees huge potential in the Chinese market and expects an above-industry performance, according to the company's global chief executive officer.

Although China's economic slowdown last year had a negative effect on international IT companies, Kevin Johnson, CEO of Juniper Networks, shrugged off the doubters and expressed optimism about Juniper Networks' growth in China.

"If you look back, it appears there were some economic uncertainties that slowed network equipment spending but, at the same time, Internet traffic grew at a very rapid rate," Johnson said, in an exclusive interview with China Daily.

The explosive Internet traffic growth demanded further infrastructure investment so, in the long run, the networking industry could be very good, he added.

"Companies in China are growing very rapidly. They need to get access to the latest technology in order to sustain their growth and fuel their businesses," Johnson pointed out. That will create demand for high-performance networking gear, which is good news for Juniper Networks.

China's IT market, which was valued at $105 billion in 2012, ranked as the third-largest in the world after the US' $754 billion and Japan's $235 billion, according to a report from Forrester Research.

However, IT maturity in China is still very low. Per capita IT spending in China is only 4 percent of that in Japan and 3 percent of that in the United States - highlighting the long-term potential in the country, the report said. China is expected to have an IT spending volume of $114 billion this year, Forrester predicted.

About 20 percent of Juniper's revenue is generated in the Asia-Pacific region and China is acting as a major driving force. The Europe, Middle East and Africa contributed roughly 30 percent of revenues and the Americas about half of sales.

"The biggest challenge for Juniper doing business in China is to prioritize," Johnson said. The Chinese market is so large, while Juniper is still a mid-sized company. It requires the company to focus and carefully allocate resources, he said.

"At present, businesses with wireless service providers (such as China Mobile and China Telecom) are Juniper's major focus," he said.

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