Welcome to the Sonus Networks fourth quarter and full year 2009 financial results conference call. At this time I would like to remind everyone that today’s call is being recorded and all participants are currently in a listen only mode. Afterwards we will conduct a question-and-answer session. (Operator Instructions) I would now like to turn the conference over to Lucy Millington at Sonus. Please go ahead, Ms. Millington.

Thank you, operator and good afternoon everyone. Welcome to Sonus Networks fourth quarter and full year 2009 financial results conference call, thank you for joining us today. With me on the call this afternoon are Richard Nottenburg, our President and Chief Executive Officer and Wayne Pastore, our Interim Chief Financial Officer, who will both address you shortly. Also with us is Guru Pai, our Executive Vice President and Chief Operating Officer. Guru will be available to answer your questions when our prepared comments have concluded. Before we get started, 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 remarks about Sonus Networks’ future expectations, plans and prospects constitute forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. These projections and statements are neither promises nor guarantees and instead are just predications and involve various risks and uncertainties such that actual events or financial results may differ materially from those we’ve 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 the risk factor section of our just filed annual report on form 10-K, which is on file with the SEC. : Please also be reminded that due to our sale of Zynetix subsidiary in the fourth quarter of 2008, the results of Zynetix have been classified as discontinued operations in our statements of operations for 2008. So they would be excluded from any discussion of our operating results for the fiscal 2008 period. Finally, please note that during our call we will be referring to certain GAAP and non-GAAP financial measures within the meaning of SEC regulation. A reconciliation of the non-GAAP to comparable to GAAP financial measures along with our earnings press release is available in the Investor Relations section of our website at www.sonusnet.com. A recording of this telephone call will be available until March 11, 2010. The instructions for accessing this recording and a replay of the webcast will be available on the Sonus Networks Investor Relations website. Please visit www.sonusnet.com About Us, Investor Relations for details. I’d now like to turn the call over to our CEO Richard Nottenburg. Please go ahead, Rich.

Thanks, Lucy. Good afternoon everyone, thank you for joining us on the call today. Before I turn to our results, I like to formally congratulate Guru Pai, our Chief Operating Officer and Wayne Pastore, our Interim CFO on their new roles with Sonus. Since joining Sonus as Senior Vice President and General Manager in December 2008, Guru has made important contributions to our company in sales, product development and overall go-to-market strategy. As we enhance our new product initiatives and increase our efforts to become an innovator and category leader in the IP to IP communications space, Guru’s keen understanding of our markets and customers needs will be instrumental to our success. I’d also like to welcome Wayne Pastore to the call. As our Vice President of Finance, Corporate Controller and Chief Accounting Officer since May 2008, Wayne knows our numbers very well. Over the past two years, Wayne has played a critical role in strengthening our internal financial controls, building a strong finance organization and improving our financial reporting processes. At the same time, he has helped us reduce costs and enhance the quality of our balance sheet. We have the utmost confidence in Wayne’s ability to oversee the financial operations of the company and I am pleased to be working with him in his new role. Now I’d like to turn to our results. We are pleased with the progress we made in 2009, not only a challenging year for Sonus but our industry as a whole. Despite that we were profitable on a non-GAAP basis for 2009 and exited the year with over $414 million of cash and investments on our balance sheet and our book-to-bill ratio was greater than 1 for the year. In 2009, we successfully reengineered Sonus. In doing so, we created substantial operating…

Thank you, Rich and thanks for the kind words. Good afternoon everyone. Today I’ll review our financial results and then provide our expectations for Q1 and outlook for full year 2010. Before I get into the financials, I’d like to make a few general comments. As Rich said, we are pleased with our finish to 2009. Our results continue to reflect our strong financial discipline throughout the business. While 2009 was a challenging year, we delivered on our commitments to manage costs and generate solid gross margins, which further strengthened our balance sheet in a difficult economic environment. In fact, we significantly overachieved on our cash expectations generating over $26 million during the year, then with cash and investments of approximately $414 million. Please note that our financial results can vary significantly from quarter to quarter; so as always, we encourage you to evaluate us on a longer-term basis. With that I’ll begin my review of Q4 and then move on to select full year 2009 financial information. Revenues for the fourth quarter were $68.7 million, up 22% from $56.2 million in Q3 2009 and down 23% from $89.5 million in Q4 of 2008. As a reminder, I’d like to point out that our Q4 2008 results reflected revenue of $21.3 million from T-Systems. Given the size of the deal is low margin profile, it had material effect on both our revenue and gross margin for Q4 2008. Our overall book-to-bill in the quarter was above 1 and our product only book-to-bill was less than 1. Our product only book-to-bill on a full year basis was above 1. There were two customers that contributed greater than 10% of total revenue in the fourth quarter and they were BT and a major tier 1 North American local exchange carrier. Our top…

Thank you, Wayne. Operator, could you please provide our callers with the instructions on how to ask a question?

(Operator Instructions) In the interest of time we ask that you limit yourself to only one question and one follow-up. And your first question comes from the line of Paul Silverstein from Credit Suisse. Please proceed with your question. Paul Silverstein – Credit Suisse: Rich, I was hoping to ask about both the North American carrier site as well as the new platform you cited with respect to session border control. Can you give us any incremental insight on the new platform? I think you mentioned it’s mid 2010. So I think it hasn’t shipped yet, you’re not generating revenue yet. Do you have any customers already lined up for that? Any insight in terms of the complexion of that product relative to the current NBS platform? As I understand from what you said, it sounds like it’s a brand new platform, it’s different than what you’ve been shipping historically. And finally related to this, any incremental insight – I know it’s hard forecasting, but as you look at your session border control where you are in the marketplace, any incremental insight in terms of what we can expect revenue wise? And the corollary finally, I apologize for the multi-part, would be by implication if you’re expecting SBC to grow, you’re expecting your legacy or your current VoIP business to decline, I guess based on the guidance. Would that be accurate?

On the easiest part of the question with respect to the customer, the [LEC] – we’re not at liberty to disclose that right now, we don’t have permission to do that. So we would have done that if we could have. I think with respect to the platform, I’ll let Guru to go into more detail, let me just kind of give you kind of a highlight. I mean the overview is the platform is not just designed for running in SBC because we already run in SBC on our GSX platform and Guru will give you more details on that. The platform is designed for a whole range of new products, which are going to roll out over the next 18 to 24 months and some products will appear – will start rolling out on that platform midyear 2010. So kind of like, I mean I just wanted to kind of clear up that for a moment. With respect to our existing business I think that the way you should bifurcate the business or think about the business is as follows: The peering business, right, or sessions business, which runs on the GSX platform, the SBC – on the GSX probably has an all IP environment, that business nearly doubled year on year, I gave you the numbers for that. That business is going to continue to grow this year faster than the market and faster than the market leader, okay. I mean that’s where we have visibility to. With respect to “our hybrid trunking business”, which is extremely strong by the way, because as I told you, and just now is that we actually now select as a result of the Q4 win so forth and so on, that business actually is quite a good business and it’s very strong. The issue is in that business is that that’s more of a replacement business right, that’s depending more on the macro environment that we’re in and so we have a little more uncertainty in that business. On the other hand we see opportunities to expand that business in both in new geographies, new customers, new markets and by the way, we’re actually selling that independent of the NBS into the enterprise right now. We’ve already scored millions of dollars in the enterprise with respect to that product line. So, I mean from my point of view, media gateways, they’re going to be around for a long time and in fact we do things that you can’t do that you couldn’t even do on our new platform right, because I’ve got a TDM capability. But I’m going to let Guru to go into more details with respect to the new platform and timing and product.

Again, I’m going to answer a couple of pieces of your question that I think Rich didn’t answer. So the first one is our NBS platform and more precisely our hybrid trunking platform, we expect that gives us a competitive differentiator in the marketplace and we expect it to stay that way for quite some time, and that’s very specifically is a platform where we provide both TDM and IP to IP communications on the same platform specifically off of the GSX 9000 and hardware. Our new platform is specifically targeted towards IP to IP communications. Like Rich said, SBC is just one element and one elemental full of functionality that we will provide off that platform. We will be building applications that allow us to deploy those platforms into a variety of different marketplaces with different service providers, both wireline and wireless into the enterprise and into channels. A comment that we have made on our product portfolio in the last has been that our generic products that we have built off of the GSX family weren’t that well suited to sell into the channel market directly; that’s another issue that we solved with our new product platform. You’re right, our first product instantiation on the new platform will show up in the marketplace somewhere midyear 2010 and we anticipate subsequent product launches and product announcements into a different market and carrier assignments going forward going into the next 18 months from there. The next question that I had written down was the revenue impact of it. We expect 2010 to be far more of a bookings year with the new platform than a revenue year. Obviously just given the nature of the telecom industry and vis-à-vis having customers lined up and so on, I think that’s a little premature for us to answer. We build these things typically in concert with market requirements and so on. And when we’re ready to make product announcements we’ll do that in a much more robust fashion.

The other, Paul is, that I mean think of the following way, Paul, we wouldn’t build a new platform and make the level of investment that we made in this platform just to attack the SBC market; SBC market is interesting. Our NBS, yes, they told you before, we nearly doubled revenue year-on-year, but we’re going after something larger. I just came back from 3GSM. We think we got a big opportunity with voice over LT; we have big opportunity by enabling customers who reuse their 2G and 3G assets. And I’ll just tell you something that we didn’t tell – I didn’t put it in the release but we did do a small acquisition of space recently, small mobile acquisition of assets, which we’ll talk about more perhaps in the future. So we are very interested and we’re going to use our experience in call control, what we know how to do here in the voice over LT market. We think that’s a very, very big opportunity for the company; it builds our heritage, it will leverage our intellectual property and so the platform we have is going to be the foundation for the company for the next four years, five years. This is a big investment, this is a big thing for us. Paul Silverstein – Credit Suisse: Hey, Rich, with respect to the new platform and I understand it’s not coming out for a little bit, it’s 18 months to 24 months, there’s various variance coming out, but are you in trials or do you have any customers that have lined up for commitments and to trial the product?

We’re not right now in a position to talk about that, Paul, and we are going to provide you updates in a timely fashion. We got a lot of things going on with that platform right now and obviously, with the first application and we will give you updates – frankly, we’ll give you updates on future calls, but I’m extremely bullish on the progress we made so far. Paul Silverstein – Credit Suisse: Thank you.

Thanks, Paul.

Our next question comes from the line of George Notter from Jefferies. Please proceed with your question. George Notter – Jefferies: Hi, thanks very much. There was another question, I think Paul asked that. I would love to have you guys touch on. It was just the puts and takes on the 2010 guidance that, flat-to-low single-digit growth. Obviously, the NBS stuff is growing. I would imagine there’s differences according to different marketplaces you’re serving. Certainly you’ve got the new customer coming in with the ILEC like in North America. What elements of the business are offsetting or declining relative to those areas that are growing? A puts and takes discussion would be great. Thanks.

Yes, this is not a question of one business declining and another business increasing; it’s a question of visibility into one business and a lack of visibility into another business. We’ve got very nice visibility into our NBS business, which we are growing – that business is growing quite nicely and in fact, as I talked about, what we did year-on-year, we expect this year to that business to continue to grow fast than the market and fast than the market leader. The other business that we’re in, which is very strong and we’ve got some significant deals, which are in the funnel, but as I told you all on the last three or four conference calls, in this environment this becomes an ROI equation. We want to people to replace legacy. That’s an OpEx for CapEx decision and we have less visibility there. And that less visibility basically is sort of the right sort of the, what I call the cornerstone of [which drove the] guidance. Now if during the year, some of those deals start to pop right, and we start to see some of that CapEx becomes available and we start to see how things changed from a macro point of view, and this is more macro, it’s not a competitive issue, then obviously we will change our guidance. But right now we don’t have the visibility to give guidance with respect to the integrated piece of both businesses beyond what we have done right now. So beginning of the year a lot can happen and a lot happens in Q4. I just don’t have visibility into the back end of 2010. George Notter – Jefferies: Got it. And then just as a quick follow-up, on the Network Border Switch appliance platform that you’re building, you won a new enterprise customer here. It sounds like more of the focus is going to be not just carrier but also enterprise. I mean can you talk about how you intend to sell into the enterprise? Is it an indirect distribution model? Are you going to have direct sales? It’s not a marketplace that Sonus has historically addressed and so I guess I’m trying to figure out how you’re going to market the product. Thanks.

That’s a really great question. I’ll let Guru expand on my answer. First let me say that with respect to the NBS and with respect to our next-gen platform with the first substantiation of the SBC ran on that platform, there’s going to be no part of this market that we’re not going to look at. I mean we’re going after this market, we’re going to go after it very, very aggressively. We’re going to go after the carrier market, which we’ve been in; we’re going to go after the enterprise market. And by the way we’re going to also use, we’re also working with our carrier customers to basically resell us in that market. We’re also working with – we’re going to work with infrastructure partners and we’re going to work with other types of partners in our market to drive sales in this market. This is going to be an aggressive campaign because we believe we’ve got something with enormous strategic differentiation because we cover the full range of applications both in the carrier space and in the enterprise space. As far as the enterprise space is concerned right now, we have won, as I said in the call, a Fortune 50 but actually it’s better than the Fortune 50 customer here, millions of dollars in revenue already scored in this account and I will tell you that this is an area that we think is a substantial amount of opportunity for us both with our existing products and with the new platform, possibly a new platform. So, I think you’re going to see a different Sonus, as I told you on the last couple of conference calls, we knew that the way to grow this business without blowing your blowing up our SG&A was to go ahead and use partners. We are very aggressively doing that right now. In fact I would say in our first enterprise sale, we were working with a partner, we just can’t announce that partner, but we do have a partner for that sale.

George, this is Guru. Again, very specifically, I would not adjust our OpEx model for us to go after that revenue in the enterprise space. Our primary vehicle to get to the enterprise market through our traditional carrier customers and only selectively is through our direct sales and services team. Our current portfolio products, both that are in our current portfolio as well as stuff that we contemplate going forward are all sort of similar R&D investments to the basic profiles. It’s not like we are building enterprise specific products and building an enterprise specific distribution model that would alter our sales and marketing expense line. George Notter – Jefferies: Got it. Thank you.

Our next question comes from the line of Subu Subramanian from Sanders Morris. Please proceed with your question. Please go ahead, Mr. Subu Subramanian.

Maybe he’ll dial back in.

We will continue with the next one. The next question comes from the line of Ted Jackson from Cantor Fitzgerald. Ted Jackson – Cantor Fitzgerald: Thank you very much. I’d like to touch base just on AT&T. So my first question with regards to AT&T is that if deferred revenue from AT&T actually ticked down sequentially, is it fair to assume that you didn’t book any new bookings, if you would, from AT&T during the quarter? Could you give us an update kind of on just what’s going on at AT&T and do you see any recovery business with AT&T in 2010 or is that part of the reason for some of the decline? And then just again on to 2010, it’s my understanding that how the revenue scores is that you should have kind of a relatively larger fourth quarter and then it will fall off again. Maybe should we be thinking of less modest contribution from AT&T in 2010, I guess this is the end question. What happened in the quarter and what kind of contribution should we think of as we think about 2010?

Hi Ted, this is Wayne. So I’ll take the part about the deferred revenue. So, as I mentioned on the call, deferred revenue for AT&T did end up $30.9 million. We did obviously book new business from AT&T and we did recognize revenue from AT&T. So, I think the $30.9 million is kind of within the range of where AT&T has been over the past 12 months. That revenue because of the Rev Reg rules is all now in short term and we are expecting that to be recognized over the next 12 months at a ratable fashion. Ted Jackson – Cantor Fitzgerald: Given the fact that it went down, I mean it’s fair to assume that the – you’re not generating enough business out of AT&T to refill the pot of deferred revenue and I guess is that a trend that we – would we expect this to kind of continue going forward? Would we expect it to kind of just sort of tread water as we think – when you’re thinking about modeling for 2010, are you expecting that a portion of your deferred revenue to just to kind of tread water, go down?

So, Ted, the deferred revenue balance did go from $24.4 million in Q4 of ‘08 to the $33.9 million in Q3 of ‘09. I agree we did have a little of a drop in Q4 but I don’t think that’s necessarily indicative or what we are expecting in the future quarters.

Let me just kind of add to it. I mean AT&T is a very strong customer here, but we have a very strong relation with AT&T. There’s a lot of opportunity at AT&T but as I mentioned on prior calls, a lot of the focus of AT&T in terms of their CapEx spend has been really on wireless backlog, I mean this is all in their transcripts and things that they need to do in terms of their priorities. Clearly, we’ve got a lot of opportunity at AT&T and I’m not in a position to forecast AT&T for 2010. We certainly feel very good about them as a customer. Ted Jackson – Cantor Fitzgerald: So you hate the iPhone.

Excuse me, I’m sorry. Ted Jackson – Cantor Fitzgerald: I said so you hate the iPhone.

No, I actually love the iPhone, it’s a great device. I use it, I think it’s great. Ted Jackson – Cantor Fitzgerald: I’ll step out of line, just one quick sort of follow-up is I missed – you made some commentary relative to book-to-bill for the fourth quarter and I missed that commentary.

So, our book-to-bill for the quarter was above 1. Our product only book-to-bill was a little bit less than 1. Our product only book-to-bill for the full year was above 1.

It appears that we have time for only one more question and that’s from Catharine Trebnick from Avian Securities. Please proceed. Catharine Trebnick – Avian Securities: My question has to do with the new products, but not so much of the product or perhaps products that you will be announcing with that, but the technologies that you see driving that development in 2010 and 2011 such as perhaps policy control, SMS over LTE, SIP routing protocols. Could you give me some flavor as to some of the technologies that you’ve designed the product to?

Sure. Hey Cath, how are you? Catharine Trebnick – Avian Securities: Yes, I am very good, sorry. You know I’d ask that, so –

I know, so we have a prepared answer for you. The reality is, let’s take it at a variety of levels, right, so like Rich said in his script the two elements that we’ve inherently built on the platform, one is that we will be doing in terms of packet processing and then we’ve got general purpose computing that we can run applications on. In addition, I think our company has historically been extremely strong in doing transcoding and media interworking and we expect all these three generic elements to play fundamental roles in the network of the future especially when you’re doing IP endpoint communications. So when you start looking at – there’s basic IP element call control elements that have been sort of instantiated as session border controllers and sort of the most rudimentary implementation of IP to IP networking. On top of that obviously policy management is a very key element in establishing calls in the future. And then the next set of things that without doing an actually product announcement here, Cath, is we will be interworking media and interworking signalling across the variety of different demands. So that’ll be from mobile networks to landline networks, in between disparate mobile networks and between disparate mobile applications all on that same platform. And I think so when you start looking at it, when you start looking at any form of communication that has IP endpoints whether those endpoints are mobile endpoints, landline endpoints, we expect to be able to treat them, process them and give the operators the degree of control that they need to offer services on. Catharine Trebnick – Avian Securities: All right. That helps a lot, I appreciate it. Then I just have a basic housekeeping question. Wayne, could you restate how many shares you were expecting outstanding for fourth quarter? I didn’t catch that.

The fourth quarter or first quarter? Catharine Trebnick – Avian Securities: First quarter. Thanks, sorry.

Approximately 275 million shares.

Thank you, Catharine. Operator, do we have anyone else queued up for questions?

There are no questions at this time.

In that case that concludes Sonus Networks fourth quarter and full year 2009 financial results conference call. We would like to thank you all again for joining us and we appreciate your interest in Sonus Networks.