Sonus Snags Verizon Deal, Sees Telecom Uptick

Sonus Networks is supplying Verizon Communications with equipment to handle long-distance voice traffic on parts of its network.

The deal resulted in $2.1 million in revenues in the second quarter alone. The companies would not disclose the total value of the order.

Executives at the Westford, Mass., firm said the deal, taken with other recent wins (IDT Corp., Epana Networks, Unefon, Asia Internet Holdings), suggest that telecoms are loosening their purse strings, at least for incremental upgrades.

“Four or five years ago there was mass buildout,” Michael O’Hara, a Sonus vice president, told interentnews.com. “Now it’s a progressive thing.”

The outlook is echoed by other vendors, including Juniper Networks, which yesterday said it believes the 2-year telecom spending drought is breaking.

For Westford, Mass.-based Sonus, this contract marks its first deal with Verizon and could lead to additional business.

The New York carrier is installing Sonus’ GSX9000 Open Services Switch, the Insignus Softswitch and the Insight management system. Verizon has tested the gear in a central office and now rolling it out in additional U.S. markets (O’Hara declined to say which).

Sonus also released its second-quarter financial figures yesterday that showed narrowing losses.

For the three-month period, the company posted a net loss of $3.2 million, or 1 cent per share, on revenue of $21.4 million. The numbers show imporvement from the previous quarter, when Sonus reported a net loss of $4.4 million on revenue of $16 million.

During the quarter, Sonus also completed a public offering of common stock, adding approximately $57 million to its balance sheet.

“Our revenue growth, coupled with premier customer wins like Verizon Communications underscores our belief that the packet voice market is entering a new phase,” Hassan Ahmed, Sonus’ president and CEO said.