The last significant asset in the Nortel portfolio will likely be decided in the next two weeks or so, and NSN is again expected to be a bidder according to Avian Securities, which has been tracking this process pretty diligently. Genband is now reported to have provided the stalking-horse opening bid of just under $290 million.
The question again is whether the winner really wins anything much. We are of the view that the value of traditional carrier voice-layer technology, including the so-called NGN voice stuff, is becoming problematic given trends in voice pricing and some interesting VoIP action that includes the finalization of the Telefonica/Jajah deal.
To us, it seems very likely that 4G voice questions are already being raised, with operators wondering if they want to be in 4G voice at all, or if they do, whether some simple non-IMS approach would be better. Skype, Vonage, Jajah, and others offer low-overhead voice that’s easily applied to smartphones and other wireless devices. If mobile moves toward a non-traditional voice model, then there’s no such thing as FMC and no value to IMS assets.
Why then buy VoIP assets from Nortel? The argument that it buys a position with U.S. operators is thin in our view. Are those operators more certain of a legacy voice evolution? We doubt it.