Lucent Technologies Inc. will plug a hole in its voice-over-IP (VoIP) offerings by buying Telica Inc. for its IP-gateway products.
Lucent agreed to purchase Telica for US$295 million in stock plus incentives to keep key employees. The acquisition would give Lucent Telica’s Plexus 9000 Media Gateway, PLUS Signaling Gateway and PLUS Media Gateway Controller.
These will be rolled into Lucent’s Accelerate VoIP Solutions product line, a conglomeration of Lucent gear that the company re-labeled under one family name last fall. Accelerate also includes service applications such as IP Centrex and voice and data VPNs.
Lucent is hoping the addition of gateways to Accelerate will earn the company a larger share of the VoIP equipment market, which IDC projects will top US$15 billion by 2007.
The Telica Plexus 9000 is one of the largest media gateways, and a large gateway is something Lucent lacked and large carrier customers need, says Joe McGarvey, a senior analyst with Current Analysis Inc.
With the deal expected to close by the end of the year, Lucent will have about 18 months to integrate the Telica gear into its product line before major carriers have already settled on their IP vendors, McGarvey says. Lucent has a leg up, he feels, because carriers like to stick with their current vendors to insure interoperability with older network elements. Lucent gear is in all the major North American long-distance and local carriers’ networks.
One problem with the deal is that it gives Lucent two softswitches, the switching software that controls the gateways. “I wasn’t reassured they have a solid plan in place for that,” McGarvey says. But the two could be combined, with Lucent providing the local switching modules and Telica providing the trunking modules, he says.
Lucent says the Telica gear is ready now for wired networks, and that by the end of the year it will be fully ready for deployment in wireless networks, although Telica notes its gear is already deployed in the former AT&T Wireless network.
The measure of the Telica deal’s success will be whether some of Lucent’s major circuit-switched customers become Lucent VoIP customers, says Janet Davidson, president of Lucent’s Integrated Network Solutions (INS) business.
Verizon has a limited number of Telica gateways in its network and has signed an exclusive 18-month deal with Nortel for IP gear, but after that Verizon opens up to other vendors.
Meanwhile, other major carriers are experimenting with small IP deployments, but should be making decisions on major rollouts in the same timeframe, McGarvey says.