Sonus May Eye GSM Acquisition

Sources say Sonus is planning to buy a GSM softswitch specialist to bolster its position with wireless service providers

February 14, 2007

2 Min Read
Sonus May Eye GSM Acquisition

BARCELONA -- 3GSM World Congress -- Sonus Networks Inc. (Nasdaq: SONS) is lining up a niche, mobile-related acquisition to solidify its portfolio for wireless service providers, according to sources here at the 3GSM event.

The company in Sonus's sights is said to be Zynetix , a GSM softswitch company that has developed a single rack-unit high platform that includes all the elements needed to provide GSM services, such as a home location register (HLR), a base station controller (BSC), and an IP-based mobile switching center (MSC).

Zynetix's gear is used primarily to provide GSM services in remote locations, such as on cruise ships, short-term sites, such as portable hospitals, and to fill in coverage holes in wide-area GSM networks.

According to sources here in Barcelona, Sonus has been a partner of Zynetix for some time, and is now set to buy the company to firm up its mobile strategy.

In particular, it would fit with its new focus, announced here this week, on providing a complete set of access and voice handling capabilities to service providers that have low-power, or local area, GSM spectrum licenses, which enable companies to set up mini cell sites and offer GSM services in buildings and other localized areas. (See Sonus Unveils GSM Strategy.)

It has already supplemented that strategy by striking relationships with two of the leading names in the mini base station market – picocell player ip.access Ltd. and femtocell startup 3Way Networks . (See Sonus, IP.access Partner and Sonus, 3Way Partner.)

An initial target market is the U.K., where the regulator, Ofcom , has already awarded low-power GSM licenses, mostly to companies that don't already have mobile networks, such as BT Group plc (NYSE: BT; London: BTA), Cable and Wireless plc (NYSE: CWP), Colt Technology Services Group Ltd , and Opal Telecom Ltd. , the network operations part of Carphone Warehouse Group plc (London: CPW).

And Sonus chief marketing officer Steve Edwards says other major West European countries are on course to award spectrum licenses for such services.

What Edwards wouldn't comment on, though, is any move for Zynetix. In fact, Edwards went as far as to say that Sonus "does not have any relationship with Zynetix," adding that "ip.access does, and it’s a partner of ours." When asked if Sonus is looking to buy Zynetix, Edwards would only say: "It's interesting technology -- put it that way." (See IP.Access Demos GSM PBX.)

Zynetix's commercial director, Ian Taylor, at least admitted a link to Sonus. "We know them, and we work with them, just like we do with other partners." When asked about whether any acquisition talks had been held with Sonus, Taylor said only that Zynetix has been approached by about 10 companies regarding a takeover in the past year or so, but that he wouldn't name any of them.

— Ray Le Maistre, International News Editor, Light Reading

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