Light Reading

Genband Snares Cedar Point

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner

Genband Inc. is all but taking over the cable VoIP softswitch market after inking a deal to acquire Cedar Point Communications Inc. Terms weren't disclosed, but the deal, being announced today and expected to close this month, would bring Genband a business with 7.5 million lines and additional cable customers.

Ten-year-old Cedar Point, also privately held, was generating revenues in the neighborhood of $60 million in 2009.

Genband Chief Marketing Officer Mehmet Balos says the company intends to keep a "significant number" of Cedar Point's 100 or so employees. (Genband has more than 2,200 full-timers). However, Genband plans to integrate most of Cedar Point's functions in Derry, N.H., with Genband's facility in nearby Billerica, Mass.

He says Genband intends to continue supporting Cedar Point's flagship product, the SafariC3, but also plans to port Cedar Point's new IMS- and PacketCable 2.0-focused Safari Fusion Application Platform to GENiUS, which encompasses Genband's application, call control, session border and security product lines.

Why this matters
The deal would make Genband the cable market share leader for VoIP softswitches. Genband got its first significant batch of cable customers with the $282 million bid for the Carrier VoIP and Application Solutions (CVAS) assets of Nortel Networks Ltd. Cedar Point would complement that purchase, as it generally focuses on small and mid-sized opportunities, while CVAS tends to target large deployments. (See Genband Wins Nortel's Carrier VoIP Biz.)

"For cable, they [Genband] will practically own the market," says Gartner Inc. Research Director Akshay Sharma. "This cements their cable play."

Genband doesn't publish its financial results, but Balos said 8 percent to 10 percent of the company's income comes from cable.

The purchase would pressure Metaswitch Networks , Nokia Networks and other vendors that have chewed off smaller pieces of the cable VoIP market. Cisco Systems Inc. (Nasdaq: CSCO) is also in the game, but has trimmed its VoIP softswitch investments considerably.

The deal follows persistent rumors that Cedar Point was trying to get acquired as it struggled to develop a consistent growth strategy. Over the years, Motorola Inc. (NYSE: MOT), Sonus Networks Inc. (Nasdaq: SONS) and, most recently, Genband have been identified as potential suitors for the Derry, N.H.-based company. Cedar Point had also attracted some attention from private investors.

For more
For more about Cedar Point, including speculation on its M&A prospects, please check out these stories:

— Jeff Baumgartner, Site Editor, Light Reading Cable

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