Can you say, SS7????
March 15, 1999
Newbridge May Acquire Stake In Telehub Unit - Analyst
By BEN DUMMETT
Dow Jones Newswires
TORONTO -- Newbridge Networks Corp. (NN), a networking equipment supplier, could be in talks to acquire a stake in a unit of Telehub Communications Corp. to get access to technology that integrates data and voice networks.
Rob MacLellan, telecom equipment analyst at CT Securities Inc., said "it's my understanding" that Kanata, Ont.-based Newbridge is in talks to possibly acquire an equity stake in Telehub Communications' Telehub Technologies Corp. unit.
Through the equity stake, Newbridge would get access to the unit's software, which is used to hook up asynchronous transfer mode, or ATM, data networks with traditional voice networks. Newbridge's main business is selling equipment for ATM networks.
MacLellan said it's still not certain a deal will get done. However, if one is completed, it would be structured so that Newbridge could increase its equity in the unit over time. The analyst couldn't say how much of an equity stake Newbridge might take initially or what it would pay for a stake.
He also stressed he's not expecting Newbridge to make an announcement over the short term. And if a deal is done, MacLellan predicts the financial impact on Newbridge wouldn't show up until the middle of next year.
Closely held Telehub Communications, which is based in Gurnee, Ill., also owns another subsidiary, Telehub Networks Services Corp., which operates an ATM network, and has bought equipment from Newbridge and its alliance partner, Germany's Siemens AG (G.SIE).
Newbridge definitely needs access to the kind of technology Telehub Technologies makes.
Last month on a conference call with analysts and reporters, Alan Lutz, Newbridge's president and chief operating officer, said the company didn't bid on a recent contract to supply equipment to British Telecommunications PLC (BTY) because it lacked the necessary voice-data integration technology. At the same time, Lutz said Newbridge was addressing this issue.
A Newbridge spokesman declined to comment. And a spokesman for Telehub Communications, when contacted Friday, said he had no idea of the possibility of Newbridge and Telehub Communications forming a closer alliance.
Any interest Newbridge would have in the Telehub Communications unit would be separate from Newbridge's strategy to offer Internet Protocol services. The strategy, which analysts expect Newbridge to unveil shortly, is expected to involve the consolidation of Newbridge's operations in the Boston area, including its IronBridge Networks Inc. affiliate, which makes router technology.
-By Ben Dummett; 416
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