Cisco's telecom biz bounces off the bottom

　　Cisco said its long-suffering telecom business is finally starting to see some growth.

　　"On the telco side, we actually saw some probably low-single-digit growth in telco, which was positive to see," CEO Chuck Robbins said on the company's earnings call.

　　Robbins added that Cisco's cable revenues continue to shrink though.

　　Analyst James Crawshaw with Omdia (a Light Reading sister company) noted on social media that Cisco lumps its telecom service provider business in with its cloud efforts. But that broader operation saw orders rise 28% in the quarter.

　　Growth in Cisco's telecom business is noteworthy considering the company – along with most of the world's other big telecom vendors – has been suffering through a massive slowdown in network operator spending. In February, Cisco said that the slowdown would last longer than the company initially expected.

　　In its efforts to weather the freeze in operator spending, Cisco has restructured its telecom business amid multiple rounds of layoffs. Jonathan Davidson, formerly EVP and GM of Cisco Networking, left the company this summer after 22 years at Cisco. Jeetu Patel will now lead Cisco's Security, Collaboration and Networking units, which have been combined into one organization.

　　The context

　　Cisco isn't the only vendor signaling an end to telecom's spending winter.

　　For example, Viavi CEO Oleg Khaykin said recently that "there are signs of stabilization and improved momentum" in the spending characteristics of network operators. Viavi sells network testing and measurement gear, and is therefore often seen as a bellwether for overall demand for telecom equipment.

　　Other companies – from Ericsson to SBA Communications – have offered a similar positive outlook.

　　"In general, Cisco's results pointed to reasons to stay constructive," wrote the financial analysts at Morgan Stanley in a note to investors following the release of Cisco's latest earnings. "Spending on networking is improving coming out of inventory digestion."

　　Cisco, for its part, continues to pin much of its corporate story around AI. The company said it scored $300 million in AI infrastructure orders from unnamed webscale customers. Company officials added that Cisco remains on track to exceed its target of $1 billion in AI orders during its current fiscal year from webscale customers.

　　Cisco's stock fell slightly on the release of its earnings, but the company's shares have gained almost 20% during the past six months.