Sonus Stalking Nortel VOIP Assets: Tech Rumor of the Day

Updated with responses from Nortel and Sonus

TORONTO, Ont. (TheStreet) -- Sonus Networks(SONS Quote) is eyeing the Voice-over-IP (VOIP) division at beleaguered telecom equipment maker Nortel(NT Quote), according to at least one technology analyst.

"Our sources indicate that Sonus is aggressively pursuing the assets," wrote Catharine Trebnick, senior research analyst at Avian Securities, in a note, adding that Sonus' recent decision to cut 10% of its workforce was likely related to its Nortel plans. "We believe Sonus' latest round of North American layoffs may be attributed to Sonus seeking Nortel's VOIP assets."

Sonus is also relocating parts of its business such as R&D to India as part of a major corporate overhaul, although Trebnick feels that the VOIP purchase would be a shrewd move.

"We believe if Sonus were to acquire the Nortel assets this would be a net positive," she explained, but warned that Sonus would require external support to integrate the VOIP business.

Although not as high profile as Nortel's wireless business, the VOIP division is starting to attract attention. Samih Elhage, the Nortel executive responsible for the division, recently told the Financial Post that Nortel is close to getting a "stalking horse" bid for its VOIP business. Likely potential bidders are Sonus, Nokia Siemens Networks, Ericsson(ERIC Quote), Huawei and Alcatel-Lucent(ALU Quote), he added.

Elhage also told the Canadian newspaper that the VOIP division is profitable and generating sales at an annual run-rate of $800 million, although sales are down from $900 million in 2008.

Nortel has already clinched a $1.13 billion deal with Swedish firm LM Ericsson for $1.13 billion much of its wireless business, prompting debate in Canada about key technology heading overseas. There has also been growing speculation about the suitors pursuing other parts of Nortel's business.