What are the synergies of NexTone-Reefpoint merger? Are we confining the synergies to FMC or are we looking at Fixed AND Mobile AND the FMC opportunities?
That is the first time anyone has asked the question that way. And that is very insightful. One of the component parts in this merger comes from the mobile world and the other from the fixed world. And we will let the products from the component parts serve their respective markets. Bringing these two entities together is also complementary. One such complementary product is the IBG which we have already announced.
Is the thrust area for the combined company going to be mobile operators?
The thrust area will be operators that are looking at blending the two networks. For example we are talking to cable MSOs who are exploring the femtocell option. As the world moves towards SIP mobile devices, our offering will be very compelling to the operators.
What will the combined company have in terms of capabilities that competitors like Acme Packet on one hand and Azaire/Stoke on the other hand will not have?
We don’t see companies like Acme Packet having mobility capability like we have. Nor do we see startups like Azaire and Stoke having the signalling sessions management capabilities that we inherit from NexTone platform integrated into one IBG.
NexTone on its own has been playing in the tier 2 market. Reefpoint on the other hand has a couple of tier 1 customers. What are the prospects of the combined entity getting tier 1 business?
NexTone has started to gain traction in the tier 1 space. As a new merged company we will be pursuing the partnership approach versus direct sales approach in order to get inside the tier 1s. Partners like ZTE – we made the partnership announcement today – are significant players in their respective geographies.
Do products like femtocells or the very act of merger lock you out of partnerships that you would otherwise have as separate entities?
I cannot think of any such possibilities. We looked at that before the merger but could not think of any potential conflicts.
On the other hand, any opportunities of cross selling? How many such opportunities are out there?
In Asia Pacific market we have made progress in some of the RFPs related to the combined product IBG. These are large carriers, not tier 2 providers. That is all I can share on that front. We have been working on these deals together with NexTone for over a year now and we have brought these customers up to speed with the blended architecture.
And in any of these common deals, were NexTone and Reefpoint competing with each other? Some of the SBC vendors have been trying to get some FMC business lately.
No. Our products have been complementary in nature. That is what generated interest among the investors for further funding – to execute upon the shared opportunities.
It is always a hard task to agree upon valuations of two merging start-ups. How did you work out and agree on valuations?
Flip of the coin actually [joke] ... We had a shared investor, JP Morgan. Much of what got orchestrated was led by JP Morgan. It is a shareholder merger rather than an acquisition.
Comments (3)
Looking at IP Unity Glenayre business post merger there is reason to be positive about this as well/
Posted by Tim J | December 6, 2007 2:30 PM
Posted on December 6, 2007 14:30
one platfrom uses off the shelf hardware. other one uses proprietary hardware. that means a lot of work in terms of integration. another thing is that while previous nextone platform can sell into mobile space, reefpoint solution does not fit the fixed world. so the synergies are not exactly great. that is my personal assessment.
Posted by Jameel Atrzadeh | December 6, 2007 2:37 PM
Posted on December 6, 2007 14:37
I do agree with jameel's comment and would like to add here the class 4 functionality of Nextone with iVMS already had lot of limitations and lengthy configuration. the only plus point of Nextone is their support and quality of product but all the functionality is not working properly so how this can be overcome in reefpoint ? Tier 1, 2 and 3 all are in need of class 4 functionality with LCR and quality based routing which is not easy task in Nextone. I don’t know how it will overcome after these synergies
Posted by Bankim Brahmbhatt | January 3, 2008 7:59 AM
Posted on January 3, 2008 07:59