Light Reading
Sonus Networks, often tossed around in M&A rumors, is likely not a target for Cisco, says one analyst

Does Anyone Want Sonus?

Phil Harvey
The Philter
Phil Harvey
2/6/2013
50%
50%

Now that Oracle Corp. is buying session border controller vendor Acme Packet Inc., what happens to Sonus Networks Inc.? Is Sonus now a target itself by a larger company like Cisco Systems Inc.? The theory is out there, but at least one analyst says Cisco's pretty well set without Sonus's help. In a note to clients this week, Northland Capital Markets analyst Catharine Trebnick wrote:

    We don't believe Cisco will move to acquire Sonus Networks at this time. Why? Cisco has an enterprise SBC (CUBE) which has been gaining acceptance in the enterprise segment. According to Infonetics, in 1H'12 Cisco's enterprise SBC market share jumped to 26 percent, up 3 points Y/Y. On the carrier side, the ASR 5000 has had SBC capabilities since Cisco acquired Starent back in Oct. 2009.
What about other competitors? Perhaps they'll be able to pick off a little of Acme's market share while its execs are picking out Corvettes. For more:
— Phil Harvey, Editor-in-Chief, Light Reading

(5)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
brookseven
50%
50%
brookseven,
User Rank: Light Sabre
2/8/2013 | 5:36:12 PM
re: Does Anyone Want Sonus?
One of my bosses described a Telecom Equipment model that became more like the Aircraft industry. -áIn both cases, there are a limited number of regulated customers and there were too many suppliers. -áHis take was that there would be many fewer major suppliers and a moderate number of smaller specialists (Think of Boeing and Bombardier or Cessna). -á

I have agreed with that model and companies like Sonus have to be a specialist. -áThey simply don't have the scale to get there. -áIf they want to sell the business, then they need to be at the bleeding edge of a new wave. -áThere are ways to structure R&D to get there, but you won't get there without risk.

seven
Phil Harvey
50%
50%
Phil Harvey,
User Rank: Light Beer
2/8/2013 | 3:54:14 PM
re: Does Anyone Want Sonus?
-áYes, I can see that Sonus would have to do quite a bit to prime itself for a breakup. And, of course, my original piece was just to address the market speculation. When folks see one M&A deal, they always expect others to follow soon.

In this case I'm not so sure. Consolidation is still needed in a few telco infra areas but there's also a good argument to be made that network specialists can react more quickly to customers and be more nimble. So maybe the whole world won't end up working for Cisco after all.
brookseven
50%
50%
brookseven,
User Rank: Light Sabre
2/8/2013 | 3:20:43 PM
re: Does Anyone Want Sonus?
You should be able to detect a break up. -áThere can be value in that but Sonus (if they really think this is a good idea) would take steps to make it happen. -áIn such a move, they would make the company more modular so untangling it would be easier. -áHaving experienced a very tangled acquisition it would make things a lot easier to do.

seven
Phil Harvey
50%
50%
Phil Harvey,
User Rank: Light Beer
2/7/2013 | 10:25:04 PM
re: Does Anyone Want Sonus?
-áOr we could split it up -- Genband takes the VOIP infra and Ericsson takes the SBC software and such.

Alcatel-Lucent could sell its enterprise unit to a private equity firm, which could then add some or all of Sonus.

There are a lot of ways this could happen. Most interesting, though, is to see companies that aren't traditional telecom infra providers (like Oracle) getting bigger, faster in this space.
brookseven
50%
50%
brookseven,
User Rank: Light Sabre
2/7/2013 | 7:07:37 PM
re: Does Anyone Want Sonus?
Phil,

The way to answer your question is this:

What does Sonus have that other companies might want?
Who might have the capital to pull off that kind of acquisition?
Who in a similar space or adjacent space?

In the first question, one identifies the assets that an acquirer would want. -áFrom there, the list gets narrowed by getting down to the possible acquirers. -áThe market cap is $760M and enterprise value is about $480M. -áSo, let's say you get 2x EV + 1x (MC-EV) for a value of about $1.2B.

So....who could throw around $1.2B and wants into the SBC/VoIP Carrier space?

That would narrow it down.

seven
More Blogs from The Philter
There's an interesting tension between how much SDN can benefit service providers and how it could threaten their established businesses
Stanford's Nick McKeown says SDN won't take hold until networking equipment vendors give up some control
OneAPI may provide developers a reason to build apps and content for networks, not just mobile operating systems
Ericsson CEO Hans Vestberg defends his company's managed services deals and says he'd rather invest in R&D than make expensive acquisitions
Use our message boards to share photos from your Barcelona experience this week
Flash Poll
From The Founder
It's clear to me that the communications industry is divided into two types of people, and only one is living in the real world.
LRTV Interviews
CenturyLink: Building the Case for NFV

12|19|14   |   02:14   |   (0) comments


At the 2020 Vision Executive Summit, James Feger, VP, Network Strategy & Development at CenturyLink, talks about how the US operator is approaching virtual network functions from an operational and business case perspective.
LRTV Interviews
Liberty Global Sees Business Goldmine

12|18|14   |     |   (0) comments


Steen Sorensen, VP of business services for Liberty Global, explains where the giant international MSO sees growth potential.
LRTV Documentaries
EE: The Road to 5G

12|16|14   |   16:02   |   (1) comment


Andy Sutton, the principal network architect at UK mobile operator EE, explains how his company is using Wembley stadium as a wireless test bed and how that's helping EE to plan the evolution to 5G.
LRTV Huawei Video Resource Center
Highlights of Huawei's NFV Open Cloud Forum 2014

12|16|14   |     |   (0) comments


Huawei hosted its inaugural NFV Open Cloud Forum during the SDN & OpenFlow World Congress 2014 in Düsseldorf, Germany. The Forum brought together technology thought leaders, senior executives and telecom professionals from global carriers, industry associations, as well as other partner companies in the ecosystem, to exchange views on and collectively explore how ...
LRTV Custom TV
Realizing Operators' Digital Vision

12|16|14   |   5:23   |   (0) comments


Leveraging technology is fundamental to digital transformation but understanding customers and serving them really well is at the heart of digital businesses. TM Forum lists the following as the strategic pillars of the digital business: business agility and rapid innovation, operational agility and effectiveness, IT and data centricity, plus customer centricity. ...
LRTV Documentaries
US Cellular Injects Analytics Into LTE

12|16|14   |   2:57   |   (1) comment


US Cellular's Mario Vela explains how the operator uses analytics for network planning and what comes next as the carrier looks to eke more value out of its metrics.
LRTV Interviews
How Cox Biz Plans to Keep Growing

12|15|14   |     |   (2) comments


Steve Rowley, SVP of Cox Business, details how the third-biggest US MSO intends to boost its revenues to $2 billion and beyond over the rest of the decade
LRTV Huawei Video Resource Center
Interview With Bill Zhang, Director of SoftCOM Product Management, Huawei

12|15|14   |   2:50   |   (0) comments


Bill Zhang elaborated on Huawei's open philosophy in NFV solution development and network architecture design at the SDN & OpenFlow World Congress 2014.
LRTV Huawei Video Resource Center
Event Highlights: Huawei at SDN & OpenFlow World Congress 2014

12|15|14   |   3:43   |   (0) comments


Huawei joined the 2014 SDN & OpenFlow Congress as one of the key sponsors and contributors. At the event, Huawei reinforced the openness and flexibility of its network infrastructure strategies, and provided updates on its SDN and NVF innovations. Through participations at the exhibitions, forums and speeches, Huawei encouraged the industry to "think bigger and ...
LRTV Interviews
How Cable Biz Services Hit $10B Mark

12|12|14   |     |   (1) comment


Cable operators reached $10 billion in annual business services revenues by delving deeper into their vertical markets and expanding beyond the smallest firms.
LRTV Documentaries
Mediacom Aims to Test Connected Tractors

12|11|14   |   05:07   |   (3) comments


Cable business service provider is taking its services to the 'agribusiness' sector in partnership with farm equipment specialist John Deere and is getting involved in Gigabit Cities developments.
LRTV Interviews
TWC Business Looks Beyond $3B

12|10|14   |     |   (0) comments


TWC Business Services chief Phil Meeks explains how his unit has reached $3 billion in annual revenues and what its plans are for next year.
Upcoming Live Events
February 10, 2015, The Westin Peachtree Plaza, Atlanta, GA
March 17, 2015, The Cable Center, Denver, CO
April 14, 2015, The Westin Times Square, New York City, NY
May 6, 2015, McCormick Convention Center, Chicago, IL
May 13-14, 2015, The Westin Peachtree, Atlanta, GA
June 9-10, 2015, Chicago, IL
Hot Topics
T-Mobile, BlackBerry Flirt With Reuniting
Sarah Reedy, Senior Editor, 12/17/2014
1-Gig: Coming to a Small Town Near You
Jason Meyers, Senior Editor, Gigabit Cities/IoT, 12/17/2014
Comcast Launches 4K Streaming Service
Alan Breznick, Cable/Video Practice Leader, 12/18/2014
US Carriers, You're Going to Cuba!
Mitch Wagner, West Coast Bureau Chief, Light Reading, 12/18/2014
T-Mobile Lights Up 27 Wideband LTE Cities
Sarah Reedy, Senior Editor, 12/15/2014
Like Us on Facebook
Twitter Feed
Webinar Archive