Some much-needed good news today for Nortel Networks as the Dominion Bond Rating Service (DBRS) has removed the telecom equipment maker from its "under review" status, while confirming the ratings of some of the company's debt vehicles. That said, DBRS is still concerned Nortel's strategy on how it plans to compete and grow sales in an increasingly competitive marketplace "seems in flux" given the company's management has been distracted by accounting issues, etc. The credit rating agency also points to the growing use vendor financing as an issue - something where Nortel clearly has a limited appetite to play. "DBRS believes that going forward the company's new directors and senior management need to provide more clarity concerning future strategies. Otherwise, without meaningful growth, the company's SG&A and R&D costs will likely need to be reduced."

According to The Deal.com, the long wait for Vonage's IPO is about to end. Within the next six weeks, Vonage will apparently file with the SEC for an IPO to raise $400-million to $600-million. The company, which has more than 800,000 customers, could follow a dual-track process, which would let it pursue a merger and an IPO. Om Malik raises some interesting points about Vonage's timing given the buzz about a Skype sales or IPO, Google Talk and VOIP services from Microsoft and Yahoo. Om says it's now or never for a Vonage IPO, which jibes with my view Vonage seems to be losing its mojo. Given VCs love liqudity events such as IPOs, you have wonder whether Vonage and CEO Jeff Citron made a strategic mistake by waiting too long to do an IPO. My take is Vonage wanted to be acquired rather than go through the IPO process. The speculation was being purchased would allow Vonage to circumvent the trouble Citron has had with the SEC. The boys at Silicon Beat also have some thoughts on the curious timing of a Vonage IPO; VOIP guru Jeff Pulver, who helped Citron start Vonage five years ago, has some early-morning thoughts; while Rich Tehrani looks at what Vonage's IPO could mean for other VOIP companies.
In terms of Vonage's potential valuation, I'll go back to my back of the napkin formula using 8x8 Inc. as a base given its publicly traded. 8x8 sports a market cap of $106-million and has 73K customers. Vonage has about 800K customers so multiplying 8x8's market cap by 11 gives you $1.17-billion. After giving Vonage a $250-million to $500-million premium for its brand and investor demand for the IPO, you have a company perhaps worth $1.4 billion to $1.7-billion.
Speaking of Skype, CNet needs to get its fact straight or some sense of reality given it's reporting Skype could be worth $6-billion to $10-billion. And we all thought $3-billion was proposterous! Techdirt has the scoop on how this Skhype numbers game has gotten out of hand.

When it comes to VOIP, Google Talk may still be the talk of the town but sales of next-generation voice equipment are worthy of some attention. According to Infonetics Research, VOIP equipment sales in the second-quarter jumped 55% to $614-milion from a year ago. Meanwhile, the number of residential/SOHO customers in North America is expected to jump to 24.3 million in 2008 from 1.1 milion in 2004 as more than six million subscribers will be added in 2006, 2007 and 2008. I wonder how many of people will be Vonage customers - that is if Vonage is still Vonage in three years. In Europe, Infonetics expects the number of people using VOIP to hit 27.8 million in 2008 from 2.2 million in 2004. For Nortel watchers, the company is the leading seller of media gateway and softswitches, followed by Siemens and Sonus.