Closing on the first anniversary of Nortel’s (News
) receivership that led to the firm’s formal demise, Canadian and U.S. Courts have opened the starting gate on Nortel’s stalking horse sale of its Carrier VoIP and Application Solutions, or “CVAS,” business to Genband. Qualified bidders will be required to submit offers for the CVAS business by February 23, 2010. Competing qualified bids would then be expected to proceed to an auction, currently scheduled for Feb. 25, 2010.
Genband had made a $282 million cash bid Dec.23, 2009 to buy Nortel’s CVAS unit, including its soft switching, gateways and SIP applications. These agreements also include all patents and intellectual property that are predominantly used in the CVAS enterprise.
According to reports
, the deal would dramatically increase the size and scope of fast-growing Genband's business. It also would catapult Genband to the global leader in carrier voice over Internet protocol, which is where that Nortel division ranks today.
It's a good match, said Juan Fernandez, a telecom infrastructure analyst for research firm Gartner. “This particular unit fits straight into what Genband does,” Fernandez said in the release. “This will allow Genband to expand its penetration of key clients, such as Verizon Communications, and gain some new business with small service providers in rural areas. It also will give Genband a larger presence in North America, Europe and emerging markets.”
Nortel and Genband have been partnering
for some years and, in July 2007, Nortel agreed to resell, distribute and support Genband’ G6 Universal Media Gateway (News
) and G2 Compact Media Gateway. They complement the existing capabilities of Nortel’s CS 2000 and CS 1500, which already migrates existing line equipment from both the Nortel DMS-100 and DMS-10.
Genband media gateways, when coupled with Nortel’s Communication Server 2000 and CS 1500 enable seamless transition to VoIP for regional carriers while extending Nortel’s migration capabilities to DCO and EWSD switches: legacy digital switching solutions, which are still widely deployed in carrier telephone systems. The Nortel/Genband solution allows carriers to reuse their existing proprietary peripheral equipment rather than necessitating a full replacement of the entire TDM office.
Nortel's carrier VoIP unit generated $800 million in revenue in 2008 and is on track for about the same in 2009. Its customers include AT&T, Telefonica (News
) and Verizon.
“Nortel has been the leading soft switch provider, and Genband has been leading the gateway side,” said Genband chief executive Charlie Vogt (News
). “For our customers and prospective customers, it brings together best of breed. We wouldn't be doing this transaction if we didn't feel there are significant synergies.”
In a last hurrah the auction and sale will be occurring during Vancouver 2010 Olympic Winter Games where Nortel’s IP gear is helping the thousands of staff, volunteers, athletes, officials and suppliers stay in touch to make this global sporting event happen.
Nortel is listed as the Official Converged Network Equipment Supplier for the Games. The firm deployed for Bell Canada (News
), a national partner, the first-ever all-IP (voice, video, and data) converged network at an Olympics. Participants and support staff will have true portability through a phone number that roams with them wherever they go.
The IP network had won Nortel, and Bell, a Sustainability Star from VANOC, the event’s organizers for low energy consumption, safe disposal at the end of a product’s life and the efficient use of resources. Nortel officials said that the efficiencies its solutions, via the IP and what it calls ‘inherent efficiencies’ can deliver up to 40 percent savings over comparable equipment. Nortel also employs a best-practice e-waste program, which ensures that the majority of equipment used during the Games will be reused, with less than two per cent entering conventional waste disposal streams.
“The Sustainability Star program recognizes initiatives by Games partners, sponsors and VANOC that demonstrate positive and measurable social, economic and environmental impacts,” a report on the Vancouver 2010 Web site said.
Brendan B. Read is TMCnet’s Senior Contributing Editor. To read more of Brendan’s articles, please visit his columnist page.
Edited by Kelly McGuire