Sonus Networks Announces Strategic Acquisition to Expand Wireless Portfolio and Capture New Market Opportunities
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Sonus Acquisition of Zynetix Communications Systems Delivers Key Technology to Address Wireless Market
WESTFORD, Mass., March 27 -- Sonus Networks, Inc. (NASDAQ:SONS), a leading supplier of service provider Voice over IP (VoIP) infrastructure solutions, today announced a definitive agreement to acquire privately-held Zynetix Ltd, designers of innovative Global System for Mobile Communications (GSM) infrastructure solutions. Zynetix's newly developed and highly flexible IP-based GSM solutions, which have been designed for the most demanding applications in commercial and government wireless networks, are based on 3rd Generation Partnership Project (3GPP) architecture and incorporate all elements required to provision GSM service. The software- based solutions leverage the ubiquity of GSM handsets to provide enhanced services to end users. Sonus will integrate the Zynetix technology with its products to create leading solutions that address the end-to-end IP wireless access needs of GSM and 3G network operators worldwide.
Unlike traditional Soft-Mobile Switching Centers (MSCs), which use IP only in the core of the network, the key benefit of Zynetix technology is that it leverages existing pico- and femtocell base station technology to extend IP into the broadband access networks. Mobile operators are embracing next generation solutions that leverage IP from the core of mobile networks all the way to customer premises to deliver rich multimedia services and greater cost efficiency, while paving the way towards IMS. Integrating Zynetix technology with Sonus' IMS portfolio is a critical step in the development of Sonus' wireless portfolio of 3G and GSM next generation solutions that address the demand for carrier-class, end-to-end IP based networks.
GSM is the most popular standard for mobile phones in the world with over 2 billion subscribers across more than 212 territories. The ubiquity of the GSM standard enables international roaming between mobile phone operators allowing subscribers to use their mobile phones in many parts of the world. As mobile subscribers continue to increase, mobile operators oversubscribe the bandwidth needed to accommodate local and national calls, leading to inefficiencies and cost. The Zynetix solutions allow local (short-distance) calls to be cost-effectively routed between mobile networks or the public standard telephone network (PSTN).
The acquisition demonstrates Sonus' commitment to the accelerating wireless IP-Voice market, which is a key part of Sonus' long-term growth strategy. Sonus wireless solutions provide global network operators with compelling cost savings and industry leading reliability as well as the ability to deliver advanced applications. Zynetix's solutions complement the capabilities of Sonus' wireless portfolio and extend Sonus' position in emerging wireless picocell and femtocell architectures. By integrating Zynetix's GSM software-based Mobile Switching Center (MSC) solutions with Sonus' industry leading IP-based wireless voice core infrastructure, the Company can develop end-to-end wireless solutions that leverage in-building or localized access to GSM networks with seamless connectivity to a broadband network and provide complete broadband-cellular convergence solutions. These solutions will address opportunities in both second generation (2G) and third generation (3G) markets.
"Wireless operators continue to rapidly expand their subscriber base, and those operators are under increasing pressure to streamline the operations of their networks, while rolling out new enhanced services that create additional revenue opportunities," said Hassan Ahmed, chairman and CEO, Sonus Networks. "By integrating Zynetix's solutions into Sonus' proven wireless portfolio, Sonus will accelerate the industry's migration to IP-Voice communications. Zynetix provides Sonus with a new and unique technology solution to expand its presence in the high-growth wireless market."
"Already, we are seeing a strong interest in femtocells as a credible, cost-effective FMC application. As with any new market, companies that are first to market with reliable, high performance solutions will have an advantage," said Peter Jarich, Principal Analyst with Current Analysis. "Sonus has staked out a strong wireless position in terms of IP-Voice and IMS solutions. The strategic acquisition of a seasoned IP-GSM market player like Zynetix clearly strengthens its position while sending a signal to operators that Sonus is serious about the picocell and femtocell market opportunity."
Zynetix was founded in 2003 and began its first product shipments at the end of that year. Zynetix solutions are currently deployed in more than 30 customers worldwide, including mobile operators, government agencies and private enterprises. Andy Odgers, managing director of Zynetix, will join Sonus' Office of the Chief Technology Officer (OCTO) as Vice President of Wireless Technology. Together, the Zynetix team brings several decades of experience working at leading wireless and wireline operators around the world.
"We're excited to become a part of the Sonus team. Zynetix was founded with the goal of building best in class solutions for network operators, and by teaming with Sonus, a clear leader in the next generation voice industry, we're able to extend the benefits of our technology to a much broader audience," said Odgers. "The experience of the Zynetix team and our proven technology portfolio will be a great asset for Sonus as it looks to gain market share and promote the adoption of next generation wireless solutions."
"As mobile subscribers continue to expand globally, the ability to create innovative, convergent solutions between networks becomes increasingly important," said Jerry Rabaste, Technical Director of European telecommunications provider, Jersey Telecom. "We are looking for rich communications solutions that provide high reliability and scalability to support our growth strategy. The combination of Sonus and Zynetix will access a broader product portfolio and the industry's most trusted IP-Voice solutions."
Under terms of the agreement, Sonus will pay approximately $13 million in cash and stock for Zynetix. The acquisition is expected to close by the second week of April 2007. Upon close of the transaction, the existing Zynetix team will continue to serve and expand its customer base, while the Zynetix solution is integrated into the development of Sonus' portfolio of next generation wireless access solutions.
About Sonus Networks
Sonus Networks, Inc. is a leading provider of Voice over IP (VoIP) infrastructure solutions for wireline and wireless service providers. With its comprehensive IP Multimedia Subsystem (IMS) solution, Sonus addresses the full range of carrier applications, including residential and business voice services, wireless voice and multimedia, trunking and tandem switching, carrier interconnection and enhanced services. Sonus' voice infrastructure solutions are deployed in service provider networks worldwide. Founded in 1997, Sonus is headquartered in Westford, Massachusetts. Additional information on Sonus is available at http://www.sonusnet.com/.
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Media Relations:
Sarah McAuley
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Source: Sonus Networks, Inc.
Web site: http://www.sonusnet.com/
