Ladies and gentlemen, thank you for standing by. And welcome to the Fourth Quarter 2007 Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards we will conduct a question-and-answer session. (Operator Instructions). As a reminder this conference is being recorded today Thursday February 28, 2008. It is my pleasure to turn the conference over Ms. Jocelyn Philbrook, Vice President of Investor Relations. Please go ahead Ma'am.

Thank you. Good afternoon everyone. Thank you for jointing us today as we discuss our business performance for the fourth quarter and fiscal year-ended December 31, 2007. With me today are Sonus' Chairman, President, and CEO Hassan Ahmed, and CFO Rick Gaynor. The press release providing an overview of our business performance in the fourth quarter and fiscal 2007 was issued this afternoon at 4:05 pm Eastern Time on PR Newswire and on First Call. The text of this release also appears on our website at www.sonusnet.com. There is also a slide presentation that accompanies this conference call. If you have not already done so, please log on to the Investor Relations section of the website to view the webcast. Before Hassan offers his opening remarks, I would like to remind you that during this call, we will make projections or forward-looking statements regarding items such as future market opportunities and the company's financial performance. These projections or statements are just predictions and involve risks and uncertainties such that actual events or financial results may differ materially from those we have forecasted. As a result, we can make no assurances that any projections of future events or financial performance will be achieved. For a discussion of important risk factors that could cause actual events or financial results to vary from these forward-looking statements, please refer to Part II, Item 1a Risk Factors of our quarterly report on Form 10-Q for the quarter ended September 30, 2007. Any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. While we may elect to update forward-looking statements at some point, we specifically disclaim any obligation to do so. I would now like to turn the call over to Hassan.

Thanks Jocelyn. Good afternoon everyone and thank you for joining us. To vigorously pay off Sonus we achieve strong Q4 revenue and order activity with our customers yielding fantastic financial results. However, we have to wait a little longer to share the results with you as the audit of our financial statements is not yet complete. As a result, we are not able to report full financial results during our Q4 conference call. I appreciate you share the frustration that you all feel associated with this delay, but we cannot report results to our stakeholders without knowing that they are accurate and have been fully audited and approved by our auditors. We believe the financial statements are substantially complete. Rick and I are working very closely with all parties involved to make sure we complete any final items quickly. We are eager to get our results out to you. With that said, I want to host today's call to provide with some financial results that would help you gauge the accomplishments of our company while you await full results. So I will review our performance in Q4 and provide an outlook on Q1 and the full year 2008. And Rick is going to provide some comments on the financial results. We will open the call for questions at that point. I know you all have many question related to our financial and the process that led us to this delay, but I am going to ask you the whole boost until we are able to report full results which we expect to do within the next 15 days. Okay, now let’s get into the quarter. Overall it was an outstanding quarter for Sonus. I am pleased to report that we achieved our objective and had a tremendous close to 2007.…

Thank you. (Operator Instructions). And our first question comes from the line of Brant Thompson with Goldman Sachs. Please go ahead sir.

Great, hi guys.

Hi Brant.

Hi Brant.

I guess a couple of questions just trying to square a few things, the first is if you are going to be – the end market next year is going to grow 20 to 25% I can understand being conservative at 20%. But, do you still expect to outgrow the market next year in your own business, just to kind of square that. And the second one is can you share any light on the nature of the auditing issue, that’s right that did the away and if that issue had impacted at all, your outlook, how you are thinking about your guidance, those few things will be helpful? Thank you.

Sure thanks Brant for those questions. Let me take the first one and then I will ask Rick to pick up the second one. So, Sonus clearly has a very, very strong position in the market in fact the leading position in this market. And increasingly as you have seen, more and more operators are turning to us to help them build their networks if they migrate the networks type B, and this has certainly transitioned now into event in which major operators around the globe are taking that position. So one of the things that we are extremely confident in is as we've always described to you is to continue to grow at least as fast as the market in fact outpace the market as what we have done consistently for the last several years and we've seen us add market share quarter-by-quarter every year when the every year when the market share results come out. So, we were very, very confident doing that and we see the activity around the globe in order to be able to accomplish that. The end market is a very large opportunity and one that will generate growth for many years and so, over the long term it does expected to grow in the 20 to 25% range according to all the industry analysts. In any given year, the growth deviates from that, and I think for 2008 given the macro concerns that we see in the economy and analysts projection to have a sort of landed in the low 20’s and we’ve landed on 20% for our business we think that’s really good spot for us to be because it’s predicated largely on networks that we are building with existing customers for which we have tremendous visibility and then we see opportunities to exceed that as the market unfolds. Rick will cover the second question?

Yeah, I think as I stated in my first call with the company last quarter, the accuracy of our financial porting is my highest priority. This year end we have been very detailed and very diligent in working through our close procedures. And, at this time we believe our financial statements are substantially complete as we said on the call and which is why we feel comfortable to share revenue and other measures with you today. However, despite our best efforts and the best efforts from our auditors, we didn’t come to the conclusion that we needed more time to complete certain final quality checks before issuing for results. So, we know the seriousness of the situation, we continue to work diligently. We look forward to getting the final numbers out in the next coming days within 15 days. But you mentioned the nature of the issue, in my own mind there is no issue, it’s really a process that we need to work our way through, and it’s a quality issue we’re just trying to work away and make sure we take all the boxes and feel very comfortable with the numbers when we put them out. We are comfortable doing them I the next 15 days.

Hassan, If I could just ask another quick question from the industry standpoint, we were ramping up our tech conference out here and there is a lot of focus on wireless data. When you look at the push of wireless carriers may be into all you need bucket minute plan, do you think its likely that we will see -- and it’s likely that we are going to see a major carrier shift to an all VoiceOver IP type platform in the next kind of 18 to 24 months or do you think that’s further out?

That’s a really good question and it’s something that really you can see already in the deployments that we have been raking on. One of the major reasons for wireless operators to adopt IP Technologies in their networks and particular in their course is precisely the fact that they have gone through all the unique great plans, and as they go to all unique great plans what happens is that things like long and roaming that they used to charge you for become free, people use them more, traffic grows, network spill driven by the subscriber growth and of course, the only thing that operators can really do is cut costs in their network in order to support that traffic growth. That’s what Sonus’s solutions offer just a tremendous business justification for deployment’s alone. As we mentioned our largest network is a wireless infrastructure and it provides pay back period that are sublimed new residents as a result of being able to save those events. And now as operators have done fix rate models that are across any network you can imagine that the transformation to IP and the court and particularly IP peering between network is just something that’s going to take, really take whole than Sonus clearly leads in that arena. And by the way, I am jealous that because we are being in a call today that we are not out at your tech conference, sorry, we’re missing it for the first time, it is I think in our history, you put on a great conference.

Thanks Brant. Next question please.

Thank you. Our next question comes from the line of Troy Jensen with Piper Jaffray. Please go ahead.

Hi couple of question here. First of all it maybe for Rick, ASX, could you talk about what the margins look like for that product and when do you think this ASX s solutions will be a larger percentage of your revenues?

Sure. I think I will I will led Hassan deal with that.

Yes, actually so Troy, the first part of your question around ASX margins or access margins in general. Yes, there is a lot based on the script of the deployment and in particular the level of services that an operator deploys, but typically what happens in the access deployment system, there is a higher level of software content that goes into delivery of consumer facing services and so, as I mentioned, depending on the level of service deployed, Access networks typically becomes the software content and end up carrying some more higher margins. And access is certainly a growing portion of our business. As I described in my prepared remarks, that’s one of the fastest growing areas that we have today. We are not breaking that out separately, but it’s a solution center we are very, very excited about because that second phase of the market is really getting growing now in the access front.

You know we will see some that showing up in our results particularly of those as we start bringing RBT shipments through the P&L software, so we will start to see that.

Alright. And then just sticking on kind of access here, if you had to gauge – what’s the two market access or wireless was going to be bigger for you guys over the next tw to three years?

That’s a very good question, because, which is bigger is largely a function of timing of the development of the segment. You know, when I have talked about this before, one of the things that you know is that each of these segments emerges at different times. Access is getting going. Wireless is also underway as a meaningful segment market. I think overtime particularly in the three years and beyond timeframe wireless will exceed access simply because of the shift of subscribers. Access services are primarily a subscriber based economic model, and clearly there are lot more subscribers on the wireless side growing than they are in the wireline side.

Got it. Alright, keep up the good work guys.

Okay. Thanks Troy.

Thanks Troy. Next question please?

Our next question please. Our next question comes from the line of Subu Subrahmanyan with Sanders Morris. Please go ahead.

I just wanted to ask Hassan about order rates versus revenue growth revenue, I know for this year you would expect that order rate to grow at closely to 20 to 25% and lower revenue growth we had just reported to the back and loaded nature. I was wondering if that actually did happen because of book-to-bill for the full year came in closer to one I think and then, for the full year if you expect more of a correlation between order growth and revenue growth?

Sure. That's a very good question Subu and thank you for actually reminding us all of that. The market overall is effectively amalgamation of all carrier spending that takes place in any given year. And one of things that we did see in '07 and as Synergy and others have reported when they've modeled the market for the full year is that growth in this market in '07 because of a lot of things associated with mergers and CapEx shifts and so forth, ended up being smaller in '07 than it was in '06 than what it is expected to be in '08. And, what I'm really proud of the Sonus team is that, sort of regardless of what the growth rate is in the market. Sonus’s succeeded in adding share everytime in outpacing the market and we did that in `07, we did that in `06, and we’re focused on doing that again in 2008. 2008 is expected to grow in the low 20s as I mentioned, we were planning our business based on what we believe is a proven posture of focusing on deployments with existing customers and we're planning it for 20% growth rate. Including our market, one of the key growth areas in telecom over the long-term and a big opportunity as operators involve above their networks away from the legacy. So this market as I mentioned earlier is going to generate a lot of growth for many years, and our focus is to continue to outpace the market growth by taking share, and that's what we've been doing, that's what we expect to do again in '08.

Got it. And to follow up on BT, I know your typical cycle to turn revenues from all with shipments is usually like nine months or so is there, I think specific to the nature what’s going in there which was taking longer, I know things like key have taken longer in the past. So I am just trying to get a little bit more color on BT?

Sure. What we’ve said in the past that we do have customers that come in faster than our typical or our average rate clearly. I know we have once that take longer, and typically, what tends to be longer from a conversion standpoint is a new large international because we built Sonus to be a very strategic supplier to the largest operators in the world. We're really being successful at that and so; operators are allowing us to do a lot more for them of course, that, from the revenue conversion standpoint, particularly in the first arm of the deployment that tends to take longer. And then as we get into expansions and what we refer to the subsequent shipments more or the same going into network expansion, those tend to convert much more quickly. So therefore, when we look at all that, we are expecting to see a lot of activity with BT during the course of '08 in orders, shipments, and so forth. But we're not anticipating recording any revenue in '08 for BT. On the other hand you look at some other customers like AT&T for example, what we have been expanding the network for sometime that tends to convert much more quickly simply because of the fact that its subsequent shipments on the existing network.

With related to that Subu, though as I said in the call, while we don't expect to score any revenue from BT this year and we do have several millions built into our OpEx plan. The work has already started. they (Inaudible) to receive the order in Q4 and work has commenced. So one another challenges we have is that in this coming year we don’t get the revenue, but we do have a lot of the expense particularly in R&D and services and that did weigh on our ability to hit our operating income goal of 17 to 20% this year and as we said we feel we are coming more towards the 14% to 16%. But I think you should consider the fact that we do have that drag on us in terms of BT expenditures.

Got it. Thanks you. That’s helpful.

Next question please?

Our next question comes from the line of Paul Silverstein with Credit Suisse. Please go ahead.

Let me ask you for some clarifications for asking a question, first half on the BT comment look at the risk of asking obvious question, if you do drag this year, does it have a corresponding benefit, extraordinary benefit from ‘09 and when are you going to announce your recognizing revenue in terms of having less OpEx against the revenue from BT?

Yeah I think that would be a true statement.

Okay.

We expect to get some benefit that you’re doing a lot of the engineer, core engineering work this year, we are not able to differ that expense. So next year when the revenue starts to flow in when we hope some of these expenses behind you.

Alright, in terms of new customers in the quarter, I apologize if you have already said, but how many were?

We said they were 82 customers in total. And we had the top five constituted 53%, and the two that were graded in 10% were AT&T and Deutsche Telecom.

Right. But, in terms of number of new customers?

I don't think we put out this quarter the number of new customers Paul. That something you would like, I could see if we can look at that for the next call.

That will be great. Can you tell us what AT&T and DT were in the aggregate?

No, I don't think I have that information available in front of me.

Alright. Now for the question. Did I hear you correctly Hassan that you think that BT has the ability the potential to be equal to or greater than AT&T or Qwest historically?

Yeah Paul, you heard that correctly, we haven’t sized and when we say that we are speaking specifically about one contract. The AGCF contract, we haven’t specifically sized that, but we’ve given you a couple of our larger customers, AT&T for example or Qwest to help you think about the scope of what we we’re doing in this program. And, we were very excited about it, it’s certainly has the ability to contribute very significantly to our business model.

And Hassan that’s just for the Access application correct, when your taking about the size? So AT&T historically, if I just take the quarters on which you’ve disclosed and there is a 10% customer, it looks like since December 3 AT&T has contributed over a $160 million just based upon the 10% disclosure? Is that what you're talking when you say the magnitude of AT&T?

Paul, I don’t have that number on top my head, but that’s exactly the (Inaudible) would go off and do.

Okay. I appreciate. Thank you.

Yeah. You are welcome.

Thanks, next question please.

Our next question comes from the line of George Notter with Jeffries. Please go ahead.

Hi guys. You guys hear me?

Yeah.

This is actually James (Inaudible) calling in for George. Hi guys.

Hi.

So, I guess just a follow up on it was Paul's question on AT&T and Qwest hearing that British Telecom that opportunity. And I think when you first announced this award you compared it just AT&T, and since we are talking about Qwest and just doing that that exercise of going through and looking at your 10% customer disclosures. I mean its kind of a big difference there. I mean is bringing Qwest in the comparison is that a change of expectation or how do we think about in terms of the BT deal?

Sure James, there is no change. I think, let me surge me correctly. I believe when we first announced it and people asked us how to think about size we offered up both of those customers as something that would, for you to think about as part of range. In the case of Qwest when we announced, we actually did announce the size to the contract of this north 100 million I think at the time. And, in the case of AT&T it is, you can do the math what Paul was doing. So, and I believe we always talk about those two as part of it, there is no change in expectation now.

Okay. So, also just on the pricing environment, I mean, how are things looking there (Inaudible) at you. Can you comment on that?

Sure. We see particularly in the large networks that we are building, particularly since we have offered quite a lot of services and I don’t mean special services, I mean, the services that our switches are able to deliver we offered full networks solutions and that's the way people buy them. What we have seen from an equipment and product standpoint is pretty good price stability and generally, that’s because of the added capability that we continue to build into the product with new software releases and the ports effectively become more and more capable. An area that we have seen some price pressure is sort of emblematic in the industry is in maintenance rates as operators look more at consolidating their networks and getting on the single vendor. We actually think that's probably not a bad thing from our perspective because what we are seeing is networks being consolidate into more uniform technologies and certainly more expose to the growth technologies, and that’s the good thing from our perspective.

Okay, thank you.

You’re welcome.

Next question please?

Our next question comes from the line of Edward Jackson with Cantor Fitzgerald. Please go ahead.

This is Rich. And – yeah, I think the answer is - it is the some degree part of the lumpy of our business and strong revenue on the 972. So Deutsche telecom has been an ongoing customer for period of time. We did completed project, it did allow us to score some revenue in the quarter. You know as we hit other milestones related to other projects going forward we will be able to do similar, but you have to creat some of the lumpiness of our business, what we cant say though is that, even if you backout Deutsche telecom and its entirety from the quarter, it’s still would have been a record setting revenue quarter for us. So it certainly did help, it helped in the quarter, as well as on the service side but it wasn’t in itself the account to made and break the quarter for us.

I am not actually talking about the quarter itself, I’m just curious relative to the huge swing in services revenue essentially it was -- services revenue is lot more than it was expected to be, I am just trying to understand kind understand why you see that might have some impact relative to the decline and guidance given in the first quarter?

You know it did have a significant part of the uptick in services, particularly related to the professional services delivered to Deutsche telecom, and it does explain some of the stepdown in Q1 as we probably will not score as much, it is the lumpy nature and we got a favorable uptick in Q4 and its -- we are not looking at the same uptick in Q1.

Okay. And then my second question going kind of on the same theme is, if I’ve gone back to my notes from know the last couple of conference calls and eventually you’ve been more or less the message that was being delivered as of August was that the company was looking for a robust fourth quarter from existing customers which was going to be beneficial for margin drive you towards your operating margin goals as we’ve just seen. And then that there would be continued solid performance into the first half of ’08 and that solid performance was going to be driven by activities with new customers and new those customers where going to be more of an international nature. And so, given the guidance has been put forward for the first quarter in ‘08 this include in some change relative to your outlook for your business and I was curious if you could talk a bit about what drove those changes. When you were looking at your business five quarters ago or five, six months ago, when you are looking at BT and saying that its being something that you will be to more, to drive some revenue for you in the first half and what caused shift if you void in terms of some of the revenue in your business in the first half of ‘08?

This is Hassan I will take that one. Let me just try to give you some color on outlook for ‘08 rather than trying to tie it to the way you described commentary previously, because much of that quite 100%, but I think I will get to the point of what you are after, I think from our perspective the outlook in ‘08 is driven as we mentioned primarily by deployments that we have under everything and it’s been customers, it’s based on a lot of factors certainly and certainly one of them is change – one of the concerns about the macro economic outlook and the scale back growth for ‘08 that analyst are projecting to the low 20s.

But when you added all up, its actually pretty good, we came out of `07 and we have said to you we would with strong sequential revenue growth, strong increase in profitability and Q4 revenues were up, our deferred revenue was up and our orders are very strong. In fact, we love to be able to very strong backlog and we are based on not only that, but the ongoing work with our customers forecasting growth for the full fiscal year. Q1 and the decline in Q1 is to a large extent timing of how that growth is recognized. We have a pattern of recording more of our growth in the second half of the year than the first, that’s going to reflect themselves again in ‘08 and Q1 is probably more affected by timing and the completion of these project for anything else and just like as a whole as we mentioned is something we look forward to as a growth here.

Sure. We have got a excellent relationship with Motorola. We participate with them in numerous geographies where Wi-MAX is being deployed and in fact I think one of the most successful and growing network that Motorola has announced and deployed (Inaudible) as a good example of work together on building the network, we’ve got a number of network on the road with Motorola and we do think actually that the delivery of voice services behind Wi-MAX is an excellent opportunity and one that the partnership dealers works very well together.

Sure. We have got a excellent relationship with Motorola. We participate with them in numerous geographies where Wi-MAX is being deployed. In fact I think one of the more successful and growing networks that Motorola has announced and deployed (inaudible) one we worked together on building a network. We have got a number of networks under way with Motorola and we do think actually that the delivery of voice services behind Wi-MAX is an excellent opportunity that the partnerships have been well together on it.

Next question.

Thank you. Due to time restraint, our final question will come from the line of Kenneth Muth with Robert Baird, please go ahead.

Hi guys on the British Telecom front, it sounds like there is a lot more RFPs kind of percolating there and you certainly have a piece of that going on right now for a potential deployment in the near term here. Can you just mention may be you talk about some other opportunities that you might be seeing in the RFP process right now and kind of how you feel your position with those.

I guess Ken, we really can't be specific on anything in that regard, but I can give you the general view that we have is that a British Telecom has embarked on one of the largest network migrations in the world, certainly in Europe, and we are very excited to be a part of it, it’s a multivendor activity, and its from our perspective it's wonderful as BT defines, it's network billed and it thinks about new ways to rollout some of these wonderful to be one of the folks who gets to sit at the table figuring all this out, beyond that, I don’t think could tell you a whole lot.

Okay. Any other kind of geographic comment you can make may be on just kind of the IMS or kind of the NextGen architecture. You see more activity on the RFP side and any specific geography whether it's Europe, Asia, or US.

Sure Ken. You know, one thing that’s really interesting when you dig into the geographies. The three main geographies that we participate in US, Europe, and Japan primarily, those have turned out to be one of the largest markets geographically in IT transformation, and Sonus has commanding market share leads there. As what we find is that whenever we play, we play it really well. And what we are seeing now is that the markets are expanding outside those three areas and so, we talked a little bit last time about a focus of ours to expand our presence. That's a focus area of ours for ‘08 by the way is expanding our sales presence beyond the three main markets, because we see opportunity developing there. We talked a little bit about our success in Canada, in Latin America. On the last call, we also talked a little bit about expanding beyond Japan and to other parts of Asia, where we had some success in Malaysia for example. And what we are seeing in general is good growth in the network migration happening not only in our traditional markets particularly in Europe, but also in emerging markets that are sort of neighboring the main market that we are in and we are expanding our focus to provide coverage there.

Okay. The last thing I have is, we’ve seen a lot in the news of all these guys going to kind of bucket plans and all you can eat plans and the implication that's going to have eventually over on the carriers margin and they have that incentive to now use your products more however, given that they are going to play this kind of margin contraction game potentially. Do you feel that you could may be like all the other vendors out there not signaling out Sonus, but any of that margin risk of price erosion additional to what has already been out in the market place?

That’s good question Ken, I think you always have to look at these things over time horizons and where you add innovation and the equation, I think the biggest that Sonus brings in the scenario where you get all you can eat plants is that we provide among the fastest return on networks where cost has to come out of the network. And therefore, it’s being able to deal with the intricacies of voice particularly in the mobile setting and being able to do that in matter of this cost effective as opposed to the way. Typically, legacy technologies or migratory technologies that NextGen provide. We have that better day and I think that’s where our customer see the value in what we do and hence we get a verdict for that with good margins and what we do for them. We expect that to continue for a while.

Great, thank you.

You are welcome.

Okay. With that I want to thank you all for joining us today. As you can we had a tremendous close to 2007 and we look forward to continued growth in 2008 as we build our leadership with operators around the world. I want thank your for your continued support at Sonus and I look forward to sharing our old results with you within the next 15 days. Thank you everyone.

Ladies and gentlemen, that does conclude the conference call for today. We thank you very much for your participation and we ask that you please disconnect your line. Have a wonderful afternoon everyone.