Scott, if you peruse some of Sounding Board Mag's recent back issues, you'll find some interesting coverage of Nokia and its newly acquired Vienna Systems and Diamond Lane Communications Corp.
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About the Vienna acquisition:
soundingboardmag.com
Posted on: 12/18/1998
Finnish wireless vendor Nokia Corp.
(www.nokia.com) today announced its plans to
acquire Internet protocol (IP) telephony/fax vendor
Vienna Systems Corp. (www.viennasys.com) for
U.S. $90 million in cash.
The deal, through which Nokia purchases Newbridge
Networks Corp.'s (www.newbridge.com) 30 percent
stake in Vienna and other investors'--including
employee and venture capital firms'--collective 70
percent stake in the company, will help fuel Nokia's
push to provide equipment and applications running IP
over wireless networks.
Pekka Lundmark, vice president wireless business
communications for Nokia, would not give planned
delivery dates or product details of such future
equipment, but says that Nokia's existing product
Nokia 9000--a handset that supports voice, fax and
Internet access via a wireless connection--is the first
such product in the wireless/IP category.
"Two main trends of business are emerging. IP as
ubiquitous [technology]. Trend two is that what
started as wireless voice will move to all kinds of
communications needs met over wireless networks,"
says Lundmark.
Of course, putting all that traffic--voice, video and
data--over wireless networks will require mobile
wireless networks to expand bandwidth and become
broadband networks--an effort various wireless
consortiums have been working on for a couple of
years. And, as with wireline packet networks, to
handle voice along with those other traffic types on a
single network will require vendors and carriers to
devise methods to ensure acceptable quality of
service (QoS) for delay-sensitive traffic such as
voice, says Lundmark, who did not elaborate on
Nokia's plans to implement that QoS capability.
Lundmark would not specify how the deal would
affect Vienna's efforts in the cable TV or telephone
network fixed wireless realms.
"Our No. 1 priority [related to this deal] will be in
wireless applications," says Lundmark.
The purchase of Vienna by Nokia follows rumors that
Vienna had been struggling financially, an issue T.
Kent Elliott, president and CEO of Vienna Systems
denied during a briefing on the acquisition. In any
case, Vienna recently lost its most publicized IP
telephony carrier customer, VIP Calling Inc.
(www.vipcalling.com), which opted to turn to Cisco
Systems Inc. (www.cisco.com) for its IP telephony
equipment.
Following the Nokia deal, Vienna's products will
continue to be available through Newbridge's existing
distribution channels.
As for Newbridge, the deal puts more gold into its
"war chest," which it's been building up through the
sale of this and other affiliates. In recent months
Newbridge also sold off its stakes in Advanced
Computer Communications (ACC) to Ericsson Inc.
(www.ericsson.com) for $28 million and of Cambrian
Systems Corp. to Nortel Networks for $300 million.
Newbridge intends to grow into a Canadian $5 billion
company by 2002, and use the money from the
affiliate deals to expand into IP network, says Alan
Lutz, Newbridge president and chief operating officer,
adding that acquisitions of its own could be part of
that strategy.
--------
More on the take out:
soundingboardmag.com
Posted: 02/1999
Nokia Nets Vienna in $90
Million Deal
Wireless, IP to be New Key Focus
By Paula Bernier
Consolidation continued in the Internet protocol (IP)
telephony space as Finnish wireless vendor Nokia
Corp. (www.nokia.com) recently announced plans to
acquire IP telephony/fax vendor Vienna Systems
Corp. (www.viennasys.com).
The US$90 million cash
deal, through which Nokia
purchases Newbridge
Networks Corp.'s
(www.newbridge.com) 30
percent stake in Vienna
and other
investors'--including
employee and venture
capital firms'--collective
70 percent stake in the
company, will help fuel
Nokia's push to provide
equipment and
applications running IP
over wireless networks.
Pekka Lundmark, vice president wireless business
communications for Nokia, would not give planned
delivery dates or product details of such future
equipment, but says that Nokia's existing product
Nokia 9000--a handset that supports voice, fax and
Internet access via a wireless connection--is the first
such product in the wireless/IP category.
"Two main trends of business are emerging,"
Lundmark says. " emergence of IP
as ubiquitous [technology]. Trend two is that what
started as wireless voice will move to all kinds of
communications needs met over wireless networks."
Of course, putting all that traffic--voice, video and
data--over wireless networks will require mobile
wireless networks to expand bandwidth and become
broadband networks--an effort various wireless
consortiums have been working on for a couple of
years. And, as with wireline packet networks, to
handle voice along with those other traffic types on a
single network will require vendors and carriers to
devise methods to ensure acceptable quality of
service (QoS) for delay-sensitive traffic such as
voice, says Lundmark, who did not elaborate on
Nokia's plans to implement that QoS capability.
Lundmark would not specify how the deal would
affect Vienna's efforts in the cable TV or telephone
network fixed wireless realms.
"Our No. 1 priority [related to this deal] will be in
wireless applications," Lundmark says.
The purchase of Vienna by Nokia follows rumors that
Vienna had been struggling financially, an issue T.
Kent Elliott, president and CEO of Vienna Systems,
denied during a briefing on the acquisition. In any
case, Vienna recently lost its most publicized IP
telephony carrier customer, VIP Calling Inc.
(www.vipcalling.com), which opted to turn to Cisco
for its IP telephony equipment (Sounding Board,
January 1999, What's News), noting Cisco's strong
investment in research and development and global
presence.
Following the Nokia deal, Vienna's products will
continue to be available through Newbridge's existing
distribution channels.
As for Newbridge, the deal puts more gold into its
"war chest," which it's been building up through the
sale of this and other affiliates. In recent months,
Newbridge also sold off its stake in Advanced
Computer Communications (ACC) to Ericsson Inc.
(www.ericsson.com) for $28 million, and also sold its
stake in Cambrian Systems Corp. to Nortel Networks
for $300 million.
Newbridge intends to grow into a $5 billion
(Canadian) company by 2002, and use the money
from the affiliate deals to expand into IP networking,
says Alan Lutz, Newbridge president and chief
operating officer, adding that acquisitions of its own
could be part of that strategy.
----------------
News on VoIP going wireless:
soundingboardmag.com
Wireless Crosses Over
The relationship between wireless and IP telephony
has since evolved significantly. For example, wireless
equipment giant Nokia Corp. (www.nokia.com) in
December announced plans to purchase IP telephony
vendor Vienna Systems Corp. (www.viennasys.com),
one of the early vendors in the VoIP market, for
approximately $90 million. Vienna was a subsidiary of
Newbridge Networks Corp. (www.newbridge.com),
which held 30 percent of privately owned Vienna's
stock prior to the Nokia deal. (Following the
acquisition, Vienna products will still be available
through Newbridge as well as other existing sales
channels. Newbridge also will have a hand in
developing future Vienna/Nokia products, with an
emphasis on ensuring interoperability between
equipment of the vendors.)
------
And mention of Nokia's acquisition of Diamond Lane's DSL line:
soundingboardmag.com
Jumping into Multiline
Such scenarios are gaining the interest of a number of
CLECs and interexchange carriers (IXCs).
In January, for example, MCI WorldCom Inc.
(www.mciworldcom.com) joined with VoDSL
gateway maker Jetstream and DSL access equipment
maker Diamond Lane Communications Corp.
(www.dlcc.com) to demonstrate multiline VoDSL and
simultaneous Internet access at the Comnet exposition
in Washington.
At that same venue, MCI WorldCom--which has
committed to deploy DSL central offices (COs)
across North America by the end of the
year--announced a $30 million investment in DSL
CLEC Rhythms NetConnections Inc.
(www.rhythms.net), which already operates DSL
facilities in 10 markets. MCI WorldCom described the
investment as part of a larger service development
partnership. Rhythms NetConnections executives,
facing a government-imposed "quiet period" at press
time as they filed with the Securities and Exchange
Commission (www.sec.gov) for an initial public
offering (IPO) of stock, declined to comment for this
story.
However, Rhythms' filing with the SEC makes some
of the goals of its partnership clear: "As part of our
anticipated strategic agreement with MCI WorldCom,
we have agreed to jointly develop voice and data
applications over a single DSL connection."
Multiline VoDSL also is on the applications road map
of another leading DSL CLEC, NorthPoint
Communications Inc. (www.northpointcom.com),
which offers a national symmetric DSL (SDSL)
network and SDSL local- loop access to more than 70
Internet service provider (ISP) partners in 10 U.S.
markets. Like Rhythms NetConnections and Covad
Communications Co. (www.covad.com), NorthPoint
represents the new breed of the 1990s: the voice and
data carrier with absolutely no circuit switches, yet
with aspirations to become an integrated data, voice
and video provider.
"Our interest is not in analog voice, but in packetized
voice," says John Stormer, marketing vice president
for NorthPoint. "We have no intention ever of owning
Class 5 switches, so voice CLECs are perfect
partners for our network." With broadband pipes in the
local loop, Stormer adds, "there's a big opportunity for
high-bandwidth community and aggregation, and the
application side is just beginning to realize the
possibilities in broadband."
In exploring such possibilities, says Jennifer Nance
Stagnaro, marketing vice president for CopperCom,
"you don't have to look for some sexy application to
justify DSL, because voice is proven money--much
more proven than data." She points to IDC Link
research that shows 6 million small businesses in the
United States are spending $36 billion on local voice
annually, or 10 times as much as the $315 million they
spend on data services.
Vendors say they can enable VoDSL with little
penalty on data access speeds. For example, in a
1.5mbps pipe, even with 10 phones active, each using
64 kilobits per second (kbps), a total capacity of
640kbps, SDSL leaves another 500kbps for data.
When all 10 phones are inactive, the system
dynamically reallocates all the unused capacity back to
data.
This integrated services opportunity inherent in
broadband access has not been lost on other IXCs,
including AT&T Corp. (www.att.com) and Sprint
Corp. (www.sprint.com), which over the past 10
months have endorsed DSL as a primary avenue to
turbo-charge the local loop with broadband,
packet-switched integrated access.
"Now both the CLECs' DSL aggressiveness and the
IXCs' targeting of the local loop are lighting a fire
under the incumbent local carriers," Stagnaro says.
They're also lighting a fire under telecommunications
and data communications equipment suppliers large
and small, in no small part because, in North America
alone, the long-term transition of hundreds of millions
of circuit-switched local loops to next-generation
packet-switched local loops opens whole new
businesses to manufacturers.
"We believe there's a $10 billion market in turning
TDM (time division multiplexed) access to
packet-based access," says Kumar Shah, vice
president of marketing for AccessLan
Communications Inc. (www.accesslan.com), maker
of a packet loop service multiplexer designed to
aggregate up to 20,000 voice connections over 1,000
DSL or T1 lines per chassis.
Also tapping into that new market, DSL access
multiplexer (DSLAM) maker Diamond Lane plans to
deliver a Jetstream-based SpeedLink Voice on Data
product by June. It claims to have taken more orders
for its DSL gear in the first month of 1999 than in all
of 1998, and that success won the ardor of global
manufacturer Nokia Inc. (www.nokia.com), which in
February paid $125 million cash for Diamond Lane,
which now does business as Nokia High Speed
Access Products.
---------
Regards, Frank Coluccio
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