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Newport to Ship Session Controller

Light Reading
News Analysis
Light Reading
7/30/2004

Session border controller newcomer Newport Networks Ltd. has completed the technical development work on its first product and will start shipping it in the next few weeks (see Newport Launches Session Controller).

The British vendor, which floated its stock in May (see Session Controller IPO Scores Success), has "completed and capped the functionality of release 1.0, and we'll be shipping the product in the next few weeks to various situations in the U.K., continental Europe, and North America," says Simon Gibson, CEO of private holding firm Wesley Clover, which is Newport's majority shareholder.

The announcement just squeezes inside the vendor's self-imposed July launch deadline that was set at the time of the IPO, and sees the vendor's box being launched into a niche but growing market that's getting hotter by the month (see Session Controllers Storm Chicago and Border Controllers Booming).

The product in question is the 1460 session controller, which, in Newport's words, is designed to sit "at the edge of the carrier network to control signalling and media streams as they enter and exit the network," and "meet the needs of service providers for scalability, performance and resilience."

And it might just live up to that billing. According to the findings of a Light Reading Insider report, "Session Controllers Report," published earlier this year, the 1460 blows away the competition in terms of technical capabilities, such as throughput and the number of consecutive sessions that can be handled.

Newport says the 1460 has already been checked out by one Tier 1 European service provider that visited the vendor's facilities in High Wycombe, U.K. "We gave the operator a functional demonstration. These days when carriers issue RFPs, PowerPoint demonstrations aren't enough," claims Gibson. "These guys want proof that the technology can do exactly what [is claimed]. So they came to us this week and brought along their specific test plan to see if the 1460 could comply, which it did with very little customization."

Newport reckons its R&D work means the 1460 will meet most carrier requirements. "We've had some unusual requirements given to us, but we did a lot of work with carriers to find out exactly what sort of things they needed this product to do, and we've incorporated those functions," says VP of marketing David Vant.

"For instance, in Asia there's a need for IPv4 and IPv6 interworking. But every carrier has its own way of deploying products to do with network resiliency and peering, for example, and each scenario is different," says Vant. "That's why we have built a very flexible platform, and have built a product that can sit in the signaling stream or be controlled by a softswitch. It can even be deployed with a combination of the two, and we've had a specific requirement from a carrier for that specific scenario."

"This isn't a one-trick pony," says Gibson, deploying his random cliche generator. "It's not just a session controller, though we're not shouting about its other capabilities at the moment. The market needs a carrier-grade session border controller just now, so that's where we are focused with the business at the moment."

Having the ability to evolve and deliver other functions looks sensible (see Session Controllers: Limited Lifespan?).

With the session controller focus in mind, Newport is building its geographic presence and talking to potential, but unidentified, channel and technology partners. "We're getting a lot of good feedback in the U.S., where we are building a team, and have sales agents in the Far East," says Gibson (see Newport Hires Ex-Nortel Exec).

And when will that deliver real results? "We expect to have our product in commercial use in the first half of next year, and possibly even 2004. We're expecting to see revenues this year and then ramp up in 2005," says the investor.

In the meantime, Newport is working with its existing partners, which include SIP-based service platform vendor Ubiquity Software Corp. and media server vendor Convedia Corp. (both Wesley Clover investments, by the way) and Marconi Corp. plc (Nasdaq: MRCIY; London: MONI), with which Newport has a memorandum of understanding (MOU) (see Newport, Ubiquity Partner on VOIP and Newport, Convedia Team Up).

That MOU involves the development and delivery of "joint solutions that can be marketed and sold to meet the existing and future needs of telecommunication service providers."

With partner Marconi heavily involved in the next-generation IP service trials at BT Group plc (NYSE: BTY; London: BTA), and Newport's plans to pack off its product to a U.K. carrier, could BT be one of the session controller's current engagements? (See Marconi Softswitches With BT.) Newport says that sort of information is confidential, Marconi was unable to comment, and BT appears to have gone on holiday ...

Well, it is late July, a Friday, and sunny in London.

So does Newport have a strategy that makes sense? Heavy Reading's analyst at large, Graham Beniston (who is working today), says the sort of product Newport is pitching, which has higher throughput and resiliency capabilities than other session controllers, is a key requirement for major carriers everywhere.

But Beniston notes that this puts Newport up against some of the industry's heavy hitters. "The major softswitch vendors will be fighting that space, so it'll be competing against the likes of Alcatel and Siemens for the carriers' business," says the analyst, though he adds that the Marconi partnership will provide some help.

Newport's team, including Sir Terry Matthews, who is chairman of both Newport and Wesley Clover, will be presenting the company's strategy and fielding questions in London in late September, following the company's interim results presentation on September 8.

Newport's share price today stands at 133.5 pence, nearly double its May launch price of 71 pence. Today's price values the customer-less vendor at nearly £73 million (US$132.5 million).

— Ray Le Maistre, International News Editor, Light Reading


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