& cplSiteName &

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        ADD A COMMENT
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
From The Founder
Cisco's Conrad Clemson, recently promoted to head up the company's Service Provider Apps & Platforms developments, talks to Light Reading's Founder and CEO Steve Saunders about how he's bringing cloud video, mobile and virtualization together to empower network operators.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
Shades of Ray
Why Analytics Is the Tech World's Digital Glue

3|27|17   |   02:20   |   (0) comments


It was obvious at the massive annual CeBIT enterprise tech trade show that the foundation for tech innovation right now is real-time analytics.
LRTV Custom TV
CommScope – Meeting the Demands of Tomorrow's Networks

3|24|17   |     |   (0) comments


Phil Sorksy, Vice President International at CommScope, discusses addressing the challenges faced by service providers today, and as future trends emerge.
LRTV Huawei Video Resource Center
AMS-IX & Huawei's OSN 902

3|24|17   |     |   (0) comments


Huawei shows how its OSN 902 platform helps the Amsterdam Internet exchange to connect the world using multiplexing.
LRTV Huawei Video Resource Center
Huawei's Smart Energy Innovation Center

3|24|17   |     |   (0) comments


In Nuremberg, Huawei showcases its latest capabilities in the digitalization of Internet resources, network infrastructure and intelligence at its Smart Energy Innovation Center.
Valley Wonk
OFC & Hyperscale: A Good Mix?

3|24|17   |   01:50   |   (0) comments


Cloud and telecom players want different types of equipment for their networks, as the chatter at OFC reveals.
LRTV Custom TV
Etisalat on NFV Journey

3|24|17   |   10:37   |   (0) comments


Etisalat is a service provider that prides itself on bringing innovative technologies to the markets it serves. It was one of the first operators to implement 3G and leads the pack in fiber penetration. Now, Esmaeel Al Hammadi, Etisalat's SVP of Network Development, explains the operator's journey to virtualization, beginning with the network core, as well as the ...
LRTV Huawei Video Resource Center
Huawei at CeBIT 2017: Day 3

3|22|17   |     |   (0) comments


Light Reading reports from CeBIT 2017 in Germany, where Huawei is exhibiting on the application of technologies and key business verticals such as transportation, smart city, manufacturing, media and finance.
LRTV Documentaries
No Regrets: Cox's Finkelstein on Fiber & More

3|22|17   |     |   (0) comments


At the Cable Next-Gen Technologies & Strategies event in Denver, Cox's Jeff Finkelstein examines the cable capex conundrum.
LRTV Documentaries
Cable Next-Gen: The 'Mile High' View From Denver

3|22|17   |   11:56   |   (0) comments


Alan Breznick kicks off the Cable Next-Gen Technologies & Strategies event in Denver, casting his thousand-yard stare over cable's current competitive landscape.
LRTV Huawei Video Resource Center
Huawei at CeBIT 2017: Day 2

3|21|17   |   2:27   |   (0) comments


Light Reading reports from CeBIT 2017 in Germany, where Huawei is exhibiting digital transformation solutions around IoT, smart data centers, OpenCloud ecosystem and its newly announced storage-as-a-service solution.
LRTV Custom TV
Driving Better Mobile Customer Experience While Transforming the Mobile Network

3|21|17   |   7:47   |   (0) comments


Light Reading talked to George McGregor of Citrix about the NetScaler Mobile Gateway - an intelligent traffic management solution which can markedly improve the customer experience provided by mobile operators, even when traffic is encrypted. Critical network services can be consolidated and virtualized using NetScaler. Because of the unique architecture, ...
LRTV Custom TV
Mastercard: What's Next for Mobile Payments?

3|21|17   |   7:49   |   (0) comments


2017 marks the fifth consecutive year for Mastercard at Mobile World Congress and it was a great time to reflect on the amazing advances the payments industry has made as well as discuss "What's Next' in the digital commerce future. We spoke to James Anderson, executive vice president of digital payments at MasterCard, about digital wallets to tokenization to ...
Upcoming Live Events
May 15-17, 2017, Austin Convention Center, Austin, TX
May 15, 2017, Austin Convention Center - Austin, TX
June 6, 2017, The Joule Hotel, Dallas, TX
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
High-Band 5G: Let's Address the Range Question, Shall We?
Dan Jones, Mobile Editor, 3/21/2017
FTTH No Slam Dunk for Cable
Carol Wilson, Editor-at-large, 3/23/2017
Eurobites: A1, Nokia Turn It Up to 11
Paul Rainford, Assistant Editor, Europe, 3/22/2017
Nokia & Facebook Push Undersea Fiber to 32 Tbit/s
Craig Matsumoto, Editor-in-Chief, Light Reading, 3/21/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
TEOCO Founder and CEO Atul Jain talks to Light Reading Founder and CEO Steve Saunders about the challenges around cost control and service monetization in the mobile and IoT sectors.
At MWC 2017, Qualcomm's CTO Matt Grob talks to Light Reading's CEO and Founder Steve Saunders about the progress being made in the development of the technologies and standards that will underpin 5G.
Animals with Phones
Neither Do We Click Here
Is that a prerequisite?
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.