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VoIP Systems

Sonus Gets BT 21CN Win

Sonus Networks Inc. (Nasdaq: SONS) says it was selected by BT Group plc (NYSE: BT; London: BTA) as part of the carrier's 21 CN project. (See Sonus Reports Q3, BT Win.)

Sonus says it will supply equipment to BT to be used in the access gateway control function (ACGF) of the carrier's deployment. BT will deploy Sonus's ASX access server to connect BT's multiservice access nodes (MSANs) with its core network.

During the company's third-quarter earnings call, Sonus CEO Hassan Ahmed said the BT contract was signed at the end of October. As a result, BT orders were not a part of third-quarter results, and Sonus does not expect any revenue from BT to be recognized in 2007.

For the third quarter 2007, Sonus reported a loss of $26.8 million, or 10 cents a share, on revenues of $76.6 million. That compares with earnings of $14.4 million, or 6 cents a share, on revenues of $76 million in the year-ago quarter.

Those results included stock-based compensation and other one-time expenses related to the company's stock option investigation. One-time expenses totaled $11.2 million in the third quarter of 2007 and $4.7 million in the third quarter of 2006.

The company's third-quarter GAAP results also included a $40 million charge related to settle a class-action lawsuit related to the company's 2004 restatement of earnings.

Ahmed said the board of directors agreed to settle the suit because "getting the litigation behind us is in the best interests of our shareholders."

The company says that it continues to expect a large jump in fourth-quarter sales, and that a shift in customer capex spend from the first half to the second half, which the company mentioned in its last earnings call, is continuing to ramp up as planned.

Despite investor worries in the wake of the company's second earnings call, the company reiterated its expectations for 14 to 17 percent revenue growth for the full year. That would place revenues above $95 million for the fourth quarter. (See Analysts Question Sonus Forecast.)

— Ryan Lawler, Reporter, Light Reading

Brightspark 12/5/2012 | 2:59:02 PM
re: Sonus Gets BT 21CN Win Do we know the size / value of the contract award?
This is a significant win - especially given the effort to secure business in this project, and for a small player too.
Ryan Lawler 12/5/2012 | 2:59:02 PM
re: Sonus Gets BT 21CN Win Sonus wouldn't comment on the deal size, saying the contract was just recently awarded in October and deployment plans have yet to be worked out. But the company did indicate that revenues will be accounted for on a per-subscriber basis.

However, it's not clear how long it will take for Sonus to actually recognize revenue from the deal. With deployment plans still looming and no actual orders coming in until probably next year, it could be a while before the company actually starts booking revenues from the win.
Ryan Lawler 12/5/2012 | 2:59:02 PM
re: Sonus Gets BT 21CN Win Sonus wouldn't comment on the deal size, saying the contract was just recently awarded in October and deployment plans have yet to be worked out. But the company did indicate that revenues will be accounted for on a per-subscriber basis.

However, it's not clear how long it will take for Sonus to actually recognize revenue from the deal. With deployment plans still looming and no actual orders coming in until probably next year, it could be a while before the company actually starts booking revenues from the win.
digits 12/5/2012 | 2:59:01 PM
re: Sonus Gets BT 21CN Win See

http://www.lightreading.com/do...

Deal size estimated to be several tens of millions of dollars over a number of years.

Valuable to Sonus in prestige/reference account terms as much as anything.

Ray
commsguru 12/5/2012 | 2:57:37 PM
re: Sonus Gets BT 21CN Win (1) It will be some time before Sonus can claim revenue under the terms of the standard 21CN contract. Given BT's product introduction roadmap and TIP process it will probably take more than a year before Sonus can claim the cash.

(2) They're going to need help from FTEL and Huawei (the MSAN vendors) to make this work, and those guys have been beaten hard by BT lately and may not be in the mood to co-operate willingly.
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