Genband gets Nortel’s CVAS business

by Jeff Wiener on February 25, 2010

I had initially thought that the Nortel CVAS division was the “crown jewel” in Nortel’s holdings, and when it went for auction in late December I had figured the initial stalking horse bid made by Genband would be bid up like the other stalking horse bids (Avaya, Ericsson …)

To my surprise, it seems that no other companies other than Genband are interested in the CVAS division.

Here is what I wrote in December:

Things are finally heating up in the CVAS (Carrier VoIP and Application Solutions) division.

It looks like GENBAND, NEC, Nokia Siemens Networks (NSN), NEC and Sonus are the top contenders. The CVAS division was / is the crown jewel in Nortel’s holdings. Customers like AT&T have upwards of 1500 DMS switches and 700,000 T-1 Class 4 lines.

Not sure what happened to the crown jewel asset ?

Here is a note that was sent by Ray Sherali to the CVAS customer base:


In line with my promise to keep you informed of the progress related to the Nortel Carrier VoIP and Application Solutions (CVAS) divestiture process, I am writing to you to share an important step forward for our business and an exciting moment for the Carrier VoIP market.

Earlier today, Nortel announced that we will not proceed to auction and will work towards closing, in the second quarter 2010, the asset sale agreements with GENBAND, Inc. (GENBAND) previously announced on December 23, 2009. The agreements provide for the sale of substantially all of the global assets of Nortel’s Carrier VoIP and Application Solutions (CVAS) business for a purchase price of US$282 million. Please click here to read the press release.

The selection of a buyer and associated deal parameters provides many answers for which you have been waiting. If approved by the courts, the agreement will:
Create one of the industry’s strongest Carrier VoIP players, in terms of market share, customer base and portfolio.
Bring together a strong portfolio of Carrier VoIP products and services that includes softswitching, wireless and wireline gateways, SIP applications, session border controllers and TDM products.
Continue to build on our recent momentum in the industry, including Nortel’s recent recognition as one of INTERNET TELEPHONY® Magazine’s 12th Annual Product of the Year Award for our Hosted IP Communications for Large Enterprise and SMBs solution.

This agreement with GENBAND provides for the transition of substantially all of Nortel’s CVAS customer contracts. In addition, GENBAND will acquire substantially all of Nortel’s CVAS assets and all patents predominantly used, and other IP exclusively used in the Nortel CVAS business.

The agreement with GENBAND strengthens the portfolio that you have adopted and delivers market-leading innovation, products and services. The sale is subject to court approvals in the U.S. and Canada, which Nortel will seek at a joint hearing on March 3, 2010, and in Israel. It is also subject to certain regulatory approvals, information and consultation with employee representatives and/or employees in certain EMEA jurisdictions, other customary closing conditions and certain post-closing purchase price adjustments.

“Uniting our two businesses will create one of the industry’s strongest Carrier VoIP players, in terms of market share, customer base and portfolio,” said Samih Elhage, president, CVAS, Nortel. “Joining forces with GENBAND will allow us to continue to provide a highly reliable solution and service offering to service providers and enterprises across the globe. I am also pleased that a significant majority of Nortel’s employees, who have been an integral part of our long-standing #1 position in the Carrier VoIP market, will have the opportunity to continue their innovative work with GENBAND.”

“This acquisition will combine softswitch and application leadership with media, session and security gateway leadership – creating the industry’s most comprehensive Carrier VoIP portfolio,” said Charles D. Vogt, president and CEO, GENBAND. “This move will put GENBAND in a unique position to cost-effectively transform today’s legacy switching infrastructure for customers around the world. We look forward to integrating Nortel’s CVAS products and welcoming their talented CVAS employees to GENBAND, as we continue to support the industry’s migration from TDM to IP, IP to IP and fixed to fixed-mobile convergence, all of which are market accelerators over the next five years.”

One of the major hurdles has already been accomplished in that U.S. and Canadian antitrust clearance for the sale has already been obtained. Nortel will work diligently with GENBAND through the integration planning and to secure closure of the deal in the second quarter of 2010, subject to the timing of regulatory approvals. Our team is committed to continue delivering the portfolio and services you have come to expect.

Our attention will turn to combining the two businesses. In the days and weeks ahead, Nortel and GENBAND will accelerate the integration planning and execution work to make this transition as smooth as possible for you. As we move into this next phase, we will continue to keep you informed on progress of the integration and communicate a portfolio and service roadmap as soon as possible.

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Written by: Jeff Wiener. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Identi.ca, or Friendfeed

{ 1 comment… read it below or add one }

Class 4 Softswitch April 5, 2011 at 7:16 am

Softswitch is a software that connects from one telephone call to another telephone call

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