Reported Nortel Bankruptcy Signals More Consolidation in Voice Telephony Market

Nortel has filed for bankruptcy and may be sold off in parts, according to one Canadian news outlet. The Globe and Mail reports Toronto-based Nortel applied for court approval for creditor protection in Delaware Wednesday morning. It was expected to file in Toronto, as well.

Nortel was Canada’s largest company at the peak of the tech boom in 2000, with a $366-billion (Canadian) market capitalization and 95,000 employees, and its decision to seek court protection from creditors marks not only the noteworthy fall of a one-time telecommunications giant, but also heralds the incredible shrinking market for competition among VoIP platform providers.

BroadSoft, Inc., a leading worldwide provider of software-based VoIP applications to the telecommunications industry, announced in December it had acquired Sylantro Systems Corporation, a provider of VoIP applications based in Campbell, California and its main competitor in the software as a service space for a decade.

Nortel’s fall leaves network equipment makers such as Alcatel Lucent and Cisco facing the challenges of competing in a VoIP market now trending clearly toward more open Web-style development of voice telephony, and raises the question of how proprietary platforms such as Broadsoft’s may eventually fare against Digium’s open-source Asterisk solution.