Doug on IP Comm – An independent voice on VoIP, telecom, and IP Communication

Who will buy Nortel’s VoIP piece?

Posted on: June 22, 2009

Squabbling between Nortel and MetaSwitch as to who has the biggest market share may be over, since Nortel is being split up into pieces for pennies on the dollar.

Light Reading has made the analyst rounds as to who might be bidding on Nortel’s VoIP and switching assets. Analysts say Sonus Networks, GENBAND, Nokia Siemens Networks (NSN), and Avaya are on the short list of buyers, with Alcatel-Lucent and MetaSwitch being outside prospects for participating in the fire sale.

GENBAND, NSN, and Sonus are believed to have requested a look at the books, but NSN says it’s not interested in buying anything other than Nortel’s CDMA and LTE wireless assets.   Sonus is allegedly the lead candidate, with about $386 million in cash in the bank at the close of the first quarter and an estimated $350 million asking price for Nortel’s businesses, but Sonus was also supposedly in the running for buying a cable head-end company so who knows. At least Sonus has settled the shareholder lawsuit hanging over its head this week…

GENBAND might be in the running, but the Nortel biz might be too big for them to swallow or break up, saith the pundits.  I think GENBAND would love to swing a deal, but I don’t think they quite have the resources (i.e. cash) to do it.

MetaSwitch — well, there’d be some serious karmic payback in that acquisition — but MetaSwitch would have to A) Get a really really good deal for the assets and B) Find some way to finance the deal.  Acquisition is not in the standard playbook of MetaSwitch and the company might be better off letting a third-party buy the Nortel assets and try to integrate them.  In the resulting chaos, MetaSwitch would be guaranteed to pick up still more market share.

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