Sonus Networks has acquired Taqua, bolstering its wireline and wireless plans with a set of complementary Class 5 switching and mobile core network capabilities.
The acquisition closed on Monday. Under the terms of the agreement, Sonus will initially pay Taqua $20 million in cash at the time of closing, the company said in its announcement, adding that there’s potential for additional cash payments if certain annual revenue thresholds are exceeded.
Taqua has deployed over 400 next-generation IP voice systems deployed with various service providers, supporting over 4 million subscribers. The vendor has 80 employees and is headquartered in Richardson, Texas, with research and development facilities in Acton and Hyannis, Massachusetts, San Jose, California, and Richardson.
Initially, Taqua found prominence in building a customer roster in the Tier 2 and Tier 3 telco market, winning deals to replace aging Nortel DMS and Siemens Class 5 voice switches.
By acquiring Taqua, Sonus said it will be able to expand its wireline portfolio by adding a Class 5 Softswitch (T7000) for network transformation projects and a Multimedia Controller used in IP Peering applications (T7100), both of which are complementary to Sonus' current product offerings.
Ray Dolan, president and CEO of Sonus, said during a press conference that Taqua’s products are very complementary to the vendor’s wireline and wireless transformation visions.
“In a Class 5 switch replacement scenario, Sonus’ SBC plays a critical role in the IP interconnect space and in the Class 4 replacement space Taqua’s T7000 can sit in the middle of Sonus gateways, policy engines, and signaling,” Dolan said. “Both of these are powerful solutions that address a key market for global service providers as they look to transform their current networks, which contain many legacy switches that have either gone end of life or end of support.”
Sonus said the acquisition will accelerate the company’s mobile strategy by adding a Virtualized Mobile Core (VMC) platform and an IP Multimedia Subsystem (IMS) service core. Taqua's VMC combines standard functions required for Voice over LTE and Voice over Wi-Fi (VoLTE/VoWiFi) solutions.
For its part, Sonus provides the session border controller (SBC) and the Diameter Edge/Core Router for next-gen IMS-based mobile applications. Sonus said that combining Sonus and Taqua’s products provides a broader VoLTE and VoWiFi solution.
“This addresses the emerging opportunity for VoLTE and VoWi-Fi and ties those two radio modalities to existing 2G and 3G networks,” Dolan said. “This will be an enormous goal market and as it evolves we will shift from the terminology of fixed and mobile to radio access and core.”
Given the complementary nature of the product lines, Dolan said that integrating Taqua’s products into its fold should be simple.
“The product sets can go together right away,” Dolan said. “We have already deployed this combination on the virtual mobile core and our proxy CSCF function in one off-shore deployment and we have had extensive discussions and lab demos with Tier 1 carriers around the world.”
The acquisition is expected to strengthen Sonus' position within key large customer RFPs. Traditionally, the majority of Taqua’s sales to Tier 2 and Tier 3 providers in the United States.
“Taqua had been limited to Tier 2 and Tier 3 customers just because of their size and their ability to innovate beyond the needs of some of those Tier 2 and Tier 3 providers,” Dolan said. “They did not have the operational bandwidth to deal with these larger opportunities, but we have met with them in large accounts and since we have an embedded history with these large accounts I think we can take those assets to move into a Tier 1 global reach.”
Another potential benefit of being purchased by Sonus is that Taqua, which will become a division of the company, is expanding the company’s revenue base.
In recent quarters, Tauqa’s revenue base has declined, reporting total revenue of $28.3 million and $25.2 million for the fiscal years ended in December 2015 and 2014, respectively. Total revenue was $16.8 million for the trailing twelve months ended June 30, 2016.
“While revenue has declined, Taqua continued to invest in the mobile growth space and has completed the core platform to address the IMS opportunity together with the Sonus SBC assets,” Dolan said. “Our basic investment thesis is simple: Sonus’ scale has to drive higher revenue and lower costs while returning Taqua to profitable growth.”
Taqua may be Sonus’ latest deal, but Dolan said they will not rule out others if they make sense for Class 5 transformation and wireless opportunities.
“We have a tremendous portfolio now to go after network transformation, but I would never exclude opportunities to tuck things in nor would I signal we’re about to do that,” Dolan said. “We have got Class 5 assets in the 7000 and 7100 and our SBC plays a nice interworking peering function in that and we have seen deployment opportunities for that, but we’ll always look to partner and potentially through partnerships tuck in other collateral assets that we use in that solution.”
- see the release
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