Over the last several years, fiscal discipline has really dominated the industry. Both consumers and businesses expect far more from their communications providers than they did just a few years ago. Offering simple telephone dial tone and an Internet connection are not going to be enough for success. At the same time, however, service providers want to continue to reduce their operational costs. As a result, one of the main challenges telecommunications companies now face is to find ways to cost effectively bring innovative services to their customers. These drivers are why most providers are working on transitioning their disparate legacy networks to one, unified, converged network infrastructure based on IP combined with Multiprotocol Label Switching (MPLS). MPLS is a technology that translates various other telecommunications protocols, such as ATM or frame relay, so they can run over an IP-based network. By eliminating their multiple networks, service providers are greatly reducing their operational costs. And by moving to an IP/MPLS network, they can mix and match all communications types—voice, data, and video—into any service their customers might want.

We believe the CRS-1 will dramatically affect carriers and their capability to successfully transition to this new era in communications. Carriers worldwide are embracing convergence and almost unanimously agree that IP/MPLS is the foundation for their new infrastructures. The CRS-1 provides carriers the means to consolidate their networks in the most efficient and cost-effective way possible. Nothing on the market can match it in terms of scalability, reliability, and flexibility. It is a system that our service provider customers will be able to base their businesses on. And I firmly believe that carriers that deploy the CRS-1 will gain profound competitive advantage over their competition through operational efficiencies and service flexibility. As we like to point out, when service providers work with Cisco, they are not just working with a network equipment maker but, rather, a business partner.