& cplSiteName &

Genband Wins Nortel's Carrier VoIP Biz

Phil Harvey
News Analysis
Phil Harvey
2/24/2010
50%
50%

If you still work for what's left of Nortel, guess what? Charlie's in charge!

Genband Inc. says it has been cleared to acquire Nortel Networks Ltd. 's Carrier VoIP and Application Solutions (CVAS) business. This means no other bidders of substance showed up for the stalking horse process.

It also means that Genband, a media gateway vendor, is now solidly in the softswitching, IP voice gateway, and SIP application business, and will likely be adding 1,638 bodies to its current staff of about 450. The acquisition is subject to court and certain regulatory approvals in Canada, the United States, and other jurisdictions, as well as other closing conditions. Genband's announcement made no mention of staff size.

Back in December, Genband offered $282 million for the Nortel assets. That bid came thanks to Genband's majority shareholder, One Equity Partners , chipping in to help the vendor vouch for the more than $400 million in total cost of ownership required for working capital, infrastructure cost, transitional services cost, taxes, and so on, to pull off the deal. (See Genband Bids $282M for Nortel's VoIP Unit.)

But Nortel's announcement this morning says the purchase price was indeed $282 million, "subject to balance sheet and other adjustments currently estimated at approximately $100 million for a net purchase price of approximately $182 million." So Genband got an even better deal than it first appeared.

With this addition and its media gateways, security gateways, and session border controller capability, Genband's competition now includes Acme Packet Inc. (Nasdaq: APKT), AudioCodes Ltd. (Nasdaq: AUDC), Huawei Technologies Co. Ltd. , Metaswitch Networks , Starent Networks Corp. (Nasdaq: STAR), and Sonus Networks Inc. (Nasdaq: SONS).

Genband's partners include Alcatel-Lucent (NYSE: ALU), Ericsson AB (Nasdaq: ERIC), Nokia Networks , NEC Corp. (Tokyo: 6701), and ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763), to name a few. It will need to work with those partners that also sell VoIP equipment to make sure it doesn't step on any toes.

Now that the deal is going through, Genband, a company that did five acquisitions in two years, embarks on its greatest challenge yet.

Charlie Vogt, Genband's CEO, summed it up this way in an interview with Light Reading in December: "How do you effectively transition TDM networks to IP and do it in a way that allows carriers to manage their back-office systems and also be able to incorporate a variety of next-generation players that are in the network today?"

So Genband, once staunchly against being a softswitch vendor itself, now sees value in blending Nortel's big carrier VoIP and softswitch installed base with its IP gateway portfolio. The pitch to service providers, no doubt, will be that they can now migrate to VoIP technologies and IP services without having to chuck their old Nortel gear.

"It’s a huge challenge for Genband," says Jim Hodges, senior analyst at Heavy Reading. "They are back into the core switching and applications space... They will have to develop roadmaps very quickly to satisfy customers they will keep the portfolio viable."

Hodges notes that if Genband pulls off the integration, it will remain a threat to all VoIP vendors, including Nokia Siemens, Ericsson, and Alcatel-Lucent, as well as Metaswitch in the Tier 2 and Tier 3 markets and Sonus in key accounts such as AT&T.

It's worth nothing that, even though there were apparently no competitive bidders in the stalking horse process, not everyone wanted Genband to be the victor. Avian Securities LLC analyst Catharine Trebnick, in a Feb. 22 note to clients, wrote that her sources said Verizon Communications Inc. (NYSE: VZ) was more supportive of Sonus making a bid for Nortel's CVAS business. But Sonus didn't want to take on the M&A challenge: "The company has commented that they are interested in growing the business organically and not in consolidation plays from an M&A perspective," Trebnick wrote.

Light Reading reported that companies expected to jump into the bidding for Nortel's CVAS included Nokia Siemens, Sonus, and NEC. Of that group, only Sonus doesn't currently have a working relationship with Genband.

For a look back at our Genband-Nortel CVAS coverage to date, please see:



— Phil Harvey, Editor-in-Chief, Light Reading

(21)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Page 1 / 3   >   >>
DCITDave
50%
50%
DCITDave,
User Rank: Light Beer
12/5/2012 | 4:42:13 PM
re: Genband Wins Nortel's Carrier VoIP Biz
Yes, good one.
Jeff Baumgartner
50%
50%
Jeff Baumgartner,
User Rank: Light Beer
12/5/2012 | 4:42:13 PM
re: Genband Wins Nortel's Carrier VoIP Biz


Cedar Point Communications is another VoIP competitor, though most of its hay has been made in cable.  JB

DCITDave
50%
50%
DCITDave,
User Rank: Light Beer
12/5/2012 | 4:42:13 PM
re: Genband Wins Nortel's Carrier VoIP Biz
forgot to list them as a competitor, too. can anyone think of any others i left out?
acohn
50%
50%
acohn,
User Rank: Light Sabre
12/5/2012 | 4:42:12 PM
re: Genband Wins Nortel's Carrier VoIP Biz


Genband better figure out quick how to avoid being replaced at all the large operators.  I can say that there is very little trust of GenBand in the marketplace due to their screwed up strategies since Vogt took over.  They have acquired and discontinued many products giving the marketplace very little faith. CVAS I believe is larger than GenBand's current organization so they may be unequipped to handle it.  If they think they can lay off more people (out of CVAS) and continue to wring support contracts out of the existing customers while delivering nothing, they will be mistaken.  There are tons of used parts on the market, and the large customers know the switch better than many of the support employees left.  Regarding Softswitching, Meta is going to be the key competitor for the small class 5 offices and Sonus on class 4. 


Broadsoft is a likely winner out of all this for class 5 services since many large carriers are already heading in that direction while capping their legacy switches from Lucent, Nortel, NSN.  More and more large carriers seem to be going with Broadsoft for Class 5, especially for business customers, and going without a traditional "switch" at all.


Genband "winning" does not give the legacy customers a "warm and fuzzy" feeling.  Instead they are skeptical at BEST, and likely to continue moving in other directions if they don't hear some good news very, very soon!

DCITDave
50%
50%
DCITDave,
User Rank: Light Beer
12/5/2012 | 4:42:12 PM
re: Genband Wins Nortel's Carrier VoIP Biz
Good post. We'll be watching Broadsoft closely, too, to see how they get on.
DCITDave
50%
50%
DCITDave,
User Rank: Light Beer
12/5/2012 | 4:42:11 PM
re: Genband Wins Nortel's Carrier VoIP Biz
Another competitor. They were winning some Nortel business from smaller carriers.
whydoyoucare
50%
50%
whydoyoucare,
User Rank: Light Beer
12/5/2012 | 4:42:09 PM
re: Genband Wins Nortel's Carrier VoIP Biz
"there is very little trust of GenBand in the marketplace due to their screwed up strategies" You mean like his plans to fire all of the American and Canadian workers to replace them with cheap Chinese workers??? It's a favorite pasttime over there and the effects are quite obvious. Look at their decline in quality since this started. Good luck to all of you Nortel customers! You too will have cheap Made-in-China products!!! Unfortunately, they'll charge you Made in the USA prices.

You now get to buy products from two Chinese companies: Huawei or Genband/Nortel

Until the Board of Directors ties Vogt's stock options to long term success, you can bet on more short-sell mentality from him. Final Answer: Customers, You lose.

My condolences to the Nortel (soon-to-be-ex-) employees.
FatherTime
50%
50%
FatherTime,
User Rank: Light Beer
12/5/2012 | 4:42:07 PM
re: Genband Wins Nortel's Carrier VoIP Biz
Service providers have been unhappy with GB support and quality for months creating opportunity to pull out the G6 and G9s. This merger will put them in the tank for at least a year - maybe permanently.
mu-law
50%
50%
mu-law,
User Rank: Light Beer
12/5/2012 | 4:42:07 PM
re: Genband Wins Nortel's Carrier VoIP Biz
To hell with the facts of this situation, I guess... the publicly released information relating to their bid says they committed to keeping 1600+ of today's CVAS employees
acohn
50%
50%
acohn,
User Rank: Light Sabre
12/5/2012 | 4:42:06 PM
re: Genband Wins Nortel's Carrier VoIP Biz


Its very likely that many of these trash-talk posts directed at genband are from disgrunted ex-employees who got the axe in one of genband's many rounds of layoffs over the past several years.


Although they have a legitimate beef, especially when it comes to replacing quality American workers with substandard offshored ones, it really doesn't contribute to the discussion to grinde your personal axe. 


If service providers really are to the point where they are threatening to pull out their genband products, then they wouldn't have any beef with naming themselves here and saying what products they're considering as replacement. Same goes for the accusations that providers are wary.


- the other acohn (LOL)

Page 1 / 3   >   >>
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.
LRTV Interviews
Amazon Prime's Hand of God Creator on Producing for OTT

3|28|17   |     |   (0) comments


Ben Watkins is the creator, writer and producer of Hand of God, a series on Amazon Prime. At Light Reading's Cable Next-Gen conference in Denver, he explained the advantages of producing for an OTT platform versus traditional TV.
LRTV Custom TV
How Metrological Keeps Cable Customers on the Couch

3|28|17   |     |   (0) comments


Metrological offers an open source solution that reduces the time it takes cable operators to integrate OTT content into the linear television viewing experience.
LRTV Documentaries
The ABC of OTT

3|28|17   |     |   (0) comments


At Light Reading's Cable Next-Gen conference in Denver, Ben Watkins, creator of Amazon Prime's Hand of God show, explained how producing content for an OTT platform differs from producing content for traditional TV.
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.
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
Eurobites: A1, Nokia Turn It Up to 11
Paul Rainford, Assistant Editor, Europe, 3/22/2017
FTTH No Slam Dunk for Cable
Carol Wilson, Editor-at-large, 3/23/2017
WiCipedia: Supergirls, No More Excuses & Media Monitoring
Eryn Leavens, Special Features & Copy Editor, 3/24/2017
Welcome to the Wild West of Privacy
Carol Wilson, Editor-at-large, 3/24/2017
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
Working From Home Doesn't Work for Everyone Click Here
You shouldn't nap on your keyboard, for instance.
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.