What Will Redknee Get From NSN's BSS Biz?

Nokia Networks has revealed details about which business support system (BSS) products will be divested to Redknee Inc. (Toronto TSX: RKN) if the proposed acquisition goes through as planned before July next year. (See Redknee to Pay $52M for NSN's BSS Unit.)

Canadian Service Provider Information Technology (SPIT) vendor Redknee has agreed to buy NSN's BSS business unit for up to €40 million (US$52.5 million), of which €15 million ($19.7 million) in cash is to be paid upon closing and up to €25 million ($32.8 million) more would be paid over 12 to 36 months for performance bonuses. (See Redknee to Acquire NSN's BSS Biz.)

With this deal, Redknee will gain 1,200 NSN employees and 130 customer relationships. The acquisition will expand Redknee's products, customer base and geographical reach, giving the company's CEO, Lucas Skoczkowski, the scale he has been seeking for some time. (See Redknee CEO: Size Matters and Is That a Redknee War Chest? .)

Indeed, on Redknee's fiscal fourth-quarter and full-year results call on Wednesday, Skoczkowski said that of the 130 NSN customers, about 90 percent would be new to the company and located mainly in Europe, the Middle East, Africa and Asia/Pacific, where the company currently does not have much presence. (See Redknee Posts $1.9M Profit.)

Skoczkowski also said that NSN chose Redknee to buy this business unit because of its ability to leverage and support the products in the long term as well as "leverage the great base of employees. All of that came in to play," he added.

So which products will Redknee get and what will NSN keep?

Accoding to NSN, these are the products that will transfer to Redknee along with the customer relationships:

The following products will also transfer to Redknee, but NSN will keep the customer relationships. Redknee will then have an OEM relationship with NSN for these products.

As for NSN's service delivery platform (SDP) and next-generation IN product, charge@once application server, the scenario is a bit more complex because some business will go to Redknee and some will remain with NSN. According to NSN, customer projects for this product that involve replacing legacy IN systems or acting as a charging frontend will be transferred to Redknee. NSN will retain those SDP and next-gen IN projects that focus on broader applications, like Instant Messaging.

NSN is also planning to keep part of its mediation product, Charge@once mediate, for its mobile broadband portfolio and particularly for packet core mediation. The corresponding customer projects would remain with NSN. But it is expected that certain convergent mediation projects that have a charging focus will transfer to Redknee, according to NSN.

— Michelle Donegan, European Editor, Light Reading Mobile