Session controller vendor Newport Networks Ltd. (London: NNG) has seen its valuation leap by 30 percent in its first few days of trading on the London Stock Exchange's AIM (Alternative Investment Market).

And that's before the company has even unveiled its first product. Such news could bring out 1999's telecom investors in a cold sweat.

Newport, which has developed a session border controller specifically for large carrier networks, announced its IPO in March (see Session Controller Startup Plans IPO), and joined AIM on Wednesday with an opening price of 71 pence ($1.23). The issue is reported to have been oversubscribed by nine times.

That opening price raised £27 million ($47.2 million), nearly double the £15 million the firm had initially planned, and valued the company at £44.7 million ($78.2 million). But the stock immediately shot up to more than 90 pence, and has remained at that level since. Today it stands at 93.5 pence, which values the firm at £58.8 million ($102.9 million).

That leap reflects the renewed interest in technology stocks, the excitement surrounding anything related to VOIP (see Residential VOIP Will Boom, Says Study), and the lasting attraction of anything backed by telecom entrepreneur Sir Terry Matthews, Newport's non-executive chairman who is best known for founding and then selling Newbridge Networks to Alcatel SA (NYSE: ALA; Paris: CGEP:PA).

It also reflects the potential of the session controller market, which is small but growing like wildfire (see Session Controllers Kick Off).

The next step for the company is to launch its product, the 1460 session controller, which is based on Newport's IP packet-processing platform, dubbed the Content Processing Platform. The official release is due this July.

But could Newport be a smidgen too late into a market that arguably already has too many players? While it's touting a product with processing capabilities and resilience that currently outstrip those of its main competitors, rivals such as Acme Packet and NexTone Communications Inc. already have customers and market experience as carriers latch on to the business potential of converged IP services (see Heavy Reading Sees Money in SIP, NTT Picks Acme Packet SBCs, NexTone Forms User Group, and Interoute Rides Europe's VOIP Wave ).

There's also a broad consensus that the session controller market will be short-lived (see Session Controllers: Limited Lifespan?). That view is shared by Nathan Franzmeier, CEO of softswitch and software-based session controller startup Emergent Network Solutions (see Economitel Selects Excel and Emergent).

"There's a definite need for session controllers, but it's going to be a short-lived market," says Franzmeier, who believes the current crop of hardware-based suppliers will have to transform into softswitch or router vendors, and cut their current prices, if they're to survive long-term.

Franzmeier, who claims Emergent has more than 30 customers for its next-gen and traditional TDM traffic management products, says that, of the current crop of session controller startups, Acme Packet and Nextone are the two that appear the most in carrier shortlists.

Newport hadn't returned calls for comment as this article was published.

— Ray Le Maistre, International Editor, Boardwatch