What do you get when you put an equipment startup, a serial telecom entrepreneur, an improving market, and a sprinkle of VOIP hype in a blender? An IPO announcement, of course. [Ed. note: Now, toss in a frog...]

The startup is session controller vendor Newport Networks Ltd., which is hoping to tap some of the renewed market interest in telecom, and VOIP in particular, with a listing on London's Alternative Investment Market (AIM).

The company is set to join AIM in May in an offering worth about £15 million (US$27.3 million).

The flotation has a 1999 ring to it, in that Newport Networks doesn't have a commercially-available product or any customers yet. The company appears to be cashing in on the most hyped niche market in telecom at the moment -- for session controllers, devices that enable IP sessions to traverse the borders of separate IP networks and bypass corporate firewalls.

Session controllers have attracted a lot of attention in the past year or so. But it's still a small market, and some have misgivings about its long-term future (see Session Controllers: Limited Lifespan?, Infonetics Forecasts VOIP Bonanza, and Session Controllers Walk the Runway).

Newport is also a little late to the party. Other vendors such as Acme Packet, MediaRing Ltd., andNexTone Communications Inc. have already got products and customers.

All the same, Newport says its session controller is different. For a kickoff, it's big. In the materials provided for February's Light Reading Insider, "Session Controller Report," Newport says the product, called the 1460, can handle up to 100,000 simultaneous VOIP calls, far in excess of rival startup vendors.

Newport says the 1460 was developed to sit in the core of a carrier network and has all the physical and technical attributes of a carrier-class product. It has the price tag to match: between $75,000 and $500,000 per unit.

Developments so far have been funded by private holding company Wesley Clover Corp., which has invested "nearly £14 million" ($25.5 million) since the company was formed in September 2000, according to the investor's CEO Simon Gibson.

Serial entrepreneur Sir Terry Matthews is, coincidentally, the chairman of both Wesley Clover and Newport. Matthews is best known as the brains behind Newbridge Networks, acquired in 2000 by Alcatel SA (NYSE: ALA; Paris: CGEP:PA) for $7.1 billion (see Alcatel Buys Newbridge ).

Now Newport is ready to strike customer deals with carriers and OEM deals with major infrastructure vendors, "and these large companies want to deal with public companies. They like the transparency that comes with a listed company, where they can have access to the financial accounts," says Gibson.

One of these "large companies" is likely to be Nortel Networks Corp. (NYSE/Toronto: NT), which Newport cites as a strategic partner, although the Canadian giant declines to comment on any relationship with Newport.

While Newport deems this transparency as essential, it hasn't stopped some of the other privately held session controller vendors from striking deals with major carriers (for example, see NTT Picks Acme Packet SBCs).

The money raised from the IPO will all be invested in the company, says Gibson, who stresses that Wesley Clover is not selling its stake in the company. It's likely that the IPO will see Wesley Clover retain majority ownership, with nearly half the company's shares being traded publicly, though the details have yet to be decided.

Gibson says the 1460 has been in tests and trials with various operators, and has for the most part completed its technical development stage. Some key features are still in development, such as SIP-to-H.323 interworking.

The focus now is on marketing and promotion rather than further technical development. Gibson says the 1460 will be launched this summer and Newport will definitely record some revenues this year, even though the major carriers have long purchasing cycles.

— Ray Le Maistre, International Editor, Boardwatch