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Print Edition StoriesThursday, July 2, 2009
Airvana, Starent Networks, Acme Packet still growing in telecom
By Jackie Noblett
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It may not be sexy, but providing the backbone for mobile broadband and Internet telecommunications services is proving to be a sweet spot for several local firms.
In the roughly two years since going public, Burlington-based Acme Packet Inc., Chelmsford-based Airvana Inc. and Tewksbury-based Starent Networks Inc. have all managed to remain profitable and growing despite flying under the radar. But unlike the telecom boom of a decade ago, mobile carriers’ desire to keep expanding their networks should provide steady, long-term sales.
“Capacity continues to be a problem, and it’s the one area that carriers are going to invest in,” said Catharine Trebnick, telecommunications analyst for Boston-based Avian Securities LLC.
In a matter of a few months, Starent has become the darling of investors and has seen its stock surge accordingly. The maker of products that allows mobile carriers to deliver multimedia content to smartphones has seen its stock price nearly double in the past year to nearly $12 per share this week, compared with the 20 percent decline in the Nasdaq composite average. Company officials say the growing dependence by consumers on their mobile devices for content requires operators to invest in their networks.
“Starent is well positioned to deliver it,” said Andy Capener, vice president of marketing at Starent. “We’ve achieved relative success because we built our solution for the mobile operators’ core network.”
Acme Packet has been able to ride the demand for Internet-based communications services to sell its session border controller device that connects Internet protocol networks at the local and service provider level. The product had been slow to get the attention of telecom giants, but now the market for session border controllers is expected to grow at a 49 percent compound annual growth rate between 2008 and 2013, according to Infonetics Research. “It began as a niche product that has emerged as an architecture,” said Acme Packet CEO Andy Ory, a 2007 Mass High Tech All-Star. “It’s now growing beyond the service provider market into the enterprise, and it almost becomes a virtuous cycle for us.”
The company’s stock is up 53 percent in the past year, and Acme Packet saw revenue continue to climb in 2008 to $116.4 million.
Even bad news seems to have little impact on the appetite of investors. While Airvana was stung by the January bankruptcy filing of its primary customer, Nortel Networks Inc., the company’s stock has jumped 24 percent in the year to $6.32 per share.
As the mobile industry continues to morph, all three companies are banking on that change to generate more growth and profits. Starent’s technology is designed to provide delivery infrastructure for faster, so-called fourth generation networks including WiMax and Long Term Evolution (LTE) protocol. Airvana sunk nearly $40 million last year into its femtocell device, which promises to allow mobile devices to route calls and data via fiber or copper broadband networks.
“The fact that our business has done well allows us to be very strong in making investments,” said Sanjeev Verma, co-founder and vice president of femto business and corporate development at Airvana.
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