Genband Snaps Up Much of Nortel VoIP AssetsBy Ericka Chickowski | Print
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The acquisition of the Nortel Amercias assets will realign the VoIP equipment and support market, pitting Genband against giants Avaya and Cisco.
Texas-based Genband hopes to change the complexion of the VoIP market for partners and buyers with the recent announcement that it plans to snap up several VoIP divisions from the once formidable, but now floundering Nortel Networks.
Just before Christmas, Genband and Nortel announced that they'd entered into an asset sale agreement that will have Genband shelling out $282 million to buy substantially all of Nortel's North America, Caribbean and Latin America (CALA) and Asia Carrier VoIP and Application Solutions (CVAS) businesses, as well as a portion of Europe, Middle East and Africa CVAS business.
"From a customer and partner standpoint, we believe our vision behind this acquisition is aligned with the industry’s desired evolution path to IP," Charles Vogt, CEO of Genband said in a statement. "This transaction, although potentially subject to a competitive bidding process, represents an opportunity to fuel affordable network migration to cutting-edge VoIP technology."
The proposed sale would put Nortel's lineup of soft-switching, gateway and SIP applications in the hands of Genband, a company that has in its own right been rising in the ranks of VoIP vendors. In November, Deloitte rated Genband as the 63rd most fast-growing tech companies in its annual Technology Fast 500 list.
In spite of Nortel's company-wide woes, its VoIP divisions have done well for themselves. The company has been the market leader in carrier VoIP since 2002, shipping more than 118 million carrier VoIP and multimedia ports in the process. That includes total sales of over 10 million SIP lines to wireline and wireless carriers globally. Even in the down economy and during the company's financial troubles, the CVAS business kept chugging, capturing the business of 10 leading service providers since 2008 and more than 40 new carrier VoIP customers in 2009.
Should the deal shake out as planned, Genband's purchase will give it a commanding lead of the market and enable its channel partners to sell a more mature portfolio. Just this year, Genband revamped its Global Reseller Program to improve partner relations worldwide. In the process, the company enhanced partner marketing, support and training programs.
Genband says the acquisition will allow partners to better service existing Nortel customers without making them invest in rip-and-replace projects.
"As a leader in next generation VoIP solutions today, our aim will be to empower service providers and their partners to access a range of leading VoIP solutions to interoperate with Nortel’s installed base, without having to replace existing infrastructure and investment," Vogt said.
Nortel is working fast and furiously in fire-sale mode this month. Less than a week before the Genband announcement, Nortel announced that it had completed the sale of its global Enterprise Solutions business to Avaya.