Genband to buy Nortel VoIP

Customer base for Nortel's carrier and applications business numbers into hundreds of carriers

VoIP, unified messaging, products and services

While we were out on Christmas holiday, Genband signed an agreement last month late to buy Nortel's Carrier VoIP and Application Solutions Business Assets for $282 million and a total cost of ownership of over $400 million. Genband is working with One Equity Partners (one of Genband's existing shareholders) to acquire the Nortel assets. Like other Nortel asset sales, the purchase is subject to a competitive bidding process and closure is subject to customary legal and regulatory approvals.

Nortel's carrier and applications business (CVAS) has a substantial customer base -- numbering into hundreds of carriers. CVAS includes not only the IP-based voice and applications platforms but the legacy Nortel DMS and TDM voice switching platforms.

Commenting on the proposed transaction in a statement, Charles D. Vogt, CEO of Genband said his company's 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 also noted that should his company become the successful bidder, Genband would expand its operational bases in Canada and North Carolina and its plans call for Genband to "make employment offers to a significant majority of Nortel CVAS employees." Like Nortel's CVAS business, Genband already owns operational bases in Texas, India and China.

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While we were out on Christmas holiday, Genband signed an agreement last month late to buy Nortel's Carrier VoIP and Application Solutions Business Assets for $282 million and a total cost of ownership of over $400 million. Genband is working with One Equity Partners (one of Genband's existing shareholders) to acquire the Nortel assets. Like other Nortel asset sales, the purchase is subject to a competitive bidding process and closure is subject to customary legal and regulatory approvals.

Nortel's carrier and applications business (CVAS) has a substantial customer base -- numbering into hundreds of carriers. CVAS includes not only the IP-based voice and applications platforms but the legacy Nortel DMS and TDM voice switching platforms.

Commenting on the proposed transaction in a statement, Charles D. Vogt, CEO of Genband said his company's 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 also noted that should his company become the successful bidder, Genband would expand its operational bases in Canada and North Carolina and its plans call for Genband to "make employment offers to a significant majority of Nortel CVAS employees." Like Nortel's CVAS business, Genband already owns operational bases in Texas, India and China.

Our observation: This isn't yet a done deal, and like others who bought Nortel assets Genband may have to pay more than originally proposed to buy Nortel's carrier business. And questions remain like how Nortel's alliances with other development partners will be affected. But carriers will ultimately benefit because no matter who eventually wins the bid, the acquiring company will no doubt want to keep the CVAS carrier customer base happy by providing good service and an evolving product portfolio.

Read more about voip & convergence in Network World's VoIP & Convergence section.

Steve Taylor is president of Distributed Networking Associates and publisher/editor-in-chief of Webtorials. Larry Hettick is a principal analyst at Current Analysis.