(UPDATE: This story was originally based on an analyst report suggesting Juniper's win came at the expense of Alcatel-Lucent. Alcatel-Lucent says that's not the case. In fact, Alcatel-Lucent claims it stands to gain footprint at Telefónica. The story has been altered accordingly)

One analyst calls Juniper Networks’s new contract with Telefónica Spain a “surprise” because the carrier has been an Alcatel-Lucent shop when it comes to routers.

As announced Thursday, Telefónica will use Juniper’s MX Series 3D Universal Edge Routers to help build its new metro network across the country. The network will deliver fixed and mobile broadband services, including video for residential users, as well as cloud services for businesses.

Juniper’s edge router portfolio will help Telefónica consolidate its wholesale, residential and business services onto a single IP infrastructure. The new network will enable capacity for multicast IPTV, network DVR, catch-up services, fixed and mobile broadband and voice, and Layer 2 and Layer 3 business VPN, as well as the flexibility to launch new services.

Juniper says part of the reason it won the deal was because of its strong NFV and SDN capabilities.

“We consider the surprise win a positive for Juniper, given the company's struggle to expand share in this market,” writes analyst Simon Leopold of Raymond James in a note issued Thursday. Alcatel-Lucent has ensconced itself at Telefónica despite entering the edge-routing market late, in 2006, as he notes. He adds that AlcaLu has been “successfully gaining worldwide IP edge routing market share since 2009, according to Infonetics.”

AlcaLu points out, however, that it's not the vendor being displaced by Juniper at Telefónica. In fact, AlcaLu expects to gain footprint at Telefónica, having recently signed a three-year agreement to replace older routers in the carrier's network.

Telefónica has been particularly active in SDN and NFV. It runs an NFV reference lab open to the entire industry, and it's open-sourced its code for NFV management and orchestration (MANO). In the first quarter, the carrier also began a massive pre-commercial trial of virtual customer premises equipment (vCPE) in the residential market.

And at Mobile World Congress in Barcelona earlier this year, Telefónica announced it would use HP’s NFV services for its Unica infrastructure.