Sonus Networks has found a sound place in the voice infrastructure market. The company makes hardware and software that public network providers -- including long-distance carriers, ISPs, and cable operators -- use to provide voice and data communications services to their subscribers. Service providers use Sonus' switches, session border control (SBC) products, and related network software partly to transition from older circuit-based equipment to VoIP-based systems. The company also provides installation, support, and training services. Its customers include AT&T, BT Group, Verizon, and Deutsche Telekom; Sonus operates worldwide, but generates most of its sales in the US.
The US is the company's largest market, accounting for about 60% of sales. Europe, the Middle East, and Africa (EMEA) and the Asia-Pacific region (primarily Japan) each contributed just over 10% of revenue. A large project in the Caribbean in 2011 boosted that region to nearly 15% of sales.
Sales and Marketing
Sonus markets its products primarily via a direct sales force, but it does utilize resellers in select markets such as Malaysia, Japan, and Israel. Bahamas Telecommunications Company and AT&T together accounted for about a quarter of sales in 2011.
Sonus has reported three consecutive years of revenue growth since seeing sales fall more than 25% in 2009 amid the worst of the recession. In 2011 revenue rose 4% to about $260 million, boosted primarily by strong performance in its SBC product group. The company recorded a net loss of about $13 million that year, down from a loss of $11 million in 2010, as cost of revenue increased in large part because of materials purchased from third parties for Sonus' Bahamas Telecommunications project.
The company's growth strategy includes international expansion in telecommunications markets in the Middle East, the Asia-Pacific region, and India. In 2011 it opened a new facility in Bangalore, India, dedicated to software development and testing, systems engineering, and customer support.
It is also targeting new market segments, including enterprises and wireless operators. In mid-2012 it announced how expanding its product and services portfolio, including enhancing its SBC products, will address enterprise trends such as big data, unified communications, and bring-your-own-device (BYOD).
Mergers and Acquisitions
Sonus continues to build its service capabilities to attract new business from carriers. It acquired one of its partners, IP service provisioning software developer Atreus Systems, in a deal that expanded the company's product line, allowing it to enhance its infrastructure with billing, customer care, and network management systems. In 2012 it bought Network Equipment Technologies for more than $40 million to boost its ability to serve enterprise customers with branch and small office products.
Sonus' largest shareholder, Legatum Capital, owns about 24% of the company. – less