Nortel Watch: Carrier VoIP Business Being Sold To Genband

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Nortel on Wednesday said it had accepted a stalking horse offer from Genband for the sale of Nortel's carrier VoIP and application solution business. According to Nortel, Genband will purchase the assets of the Nortel unit for $282 million after a series of balance sheet adjustments valued at $100 million.

Nortel's carrier VoIP and application solutions, collectively known as CVAS, include Nortel's softswitching, gateways and SIP applications. According to Nortel, it has shipped more than 118 million carrier VoIP and multimedia ports -- including 10 million SIP lines -- to both wireless and wireline carriers all over the world, and it gained about 40 new carrier VoIP customers this year alone.

Plano, Texas-based Genband, which specializes in IP infrastructure products, will purchase those portfolios as part of a joint agreement with One Equity Partners III, one of Genband's shareholders. In a statement, Genband also said having Nortel's CVAS assets would expand the product, service and support relationships it has with existing OEM partners.

"This transaction, although potentially subject to a competitive bidding process, represents an opportunity to fuel affordable network migration to cutting-edge VoIP technology," said Charles Vogt, Genband CEO, in a statement. "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."

Nortel said in a statement it expects to request U.S. and Canadian court approvals for bidding procedures -- including a bid deadline and auction date for the CVAS assets -- in January.

"The proposed transaction represents a clear and positive step forward for Nortel's CVAS customers, employees, and business. Today's announcement is a strong endorsement of our continued leadership in the Carrier VoIP market where we have held the No. 1 position since 2002," said Samih Elhage, Nortel's CVAs president, in a statement. "Nortel's industry-leadership in Carrier VoIP would not be possible without the continued commitment and support of our strong and loyal customer base of leading carriers across the globe."

If Genband's acquisition succeeds, it'll join Avaya, Ericsson, Ciena, Kapsch and Hitachi as companies that have bought or are in the process of buying large pieces of Nortel following Nortel's January 2009 bankruptcy filing.

Avaya confirmed last Friday that it had successfully finished acquiring Nortel's enterprise solutions business, and in an interview with ChannelWeb, promised a complete product roadmap for solution providers by Jan. 19.

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