Holding its own in softswitches, media gateways
Nortel this week said it is selling its Carrier VoIP and Applications Solutions (CVAS) business to GENBAND for $282 million, the latest asset to be liquidated following a failed restructuring under Chapter 11 bankruptcy. The deal is another “stalking horse” asset sale arrangement whereby GENBAND’s offer kicks off an auction process for the Nortel operations — other potential bidders could be NEC, Nokia Siemens Networks (NSN) and Sonus, or a consortium organized to divide up the assets.
Cisco didn’t make the list because it seems to be holding its own in carrier VoIP. Cisco’s softswitch sales grew by over 66% in Q3 to $24 million, for a 9% share of the market, according to Dell’Oro Group. Cisco trailed NSN, Nortel and Alcatel-Lucent.
In media gateways, Cisco was one of the drivers behind a 13% sequential increase in channel shipments in Q3, according to Dell’Oro. Cisco also grew revenue thanks to an increase in VoIP investments by North American cable operators and expansion of projects in EMEA.
GENBAND, meanwhile, needs the Nortel assets more to expand beyond its SBC footprint. The company’s revenue slid from about $10 million in Q4 of 2007 to less than $5 million in Q3 ’09, according to Dell’Oro. Meanwhile, Acme Packet, the leader in the SBC market, grew revenue 14% sequentially to $28 million, giving it a 56% share of the market — up 9 percentage points from a year ago, accoridng to Dell’Oro.
But never say never: for relatively very little cost, Cisco could take over leadership in the softswitch market by outbidding everyone for Nortel’s VoIP assets, which is an $800 million business. Not a bad way to start off the New Year…
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