NeuStar IPO Could Change the VoIP Market

PBS | I, Cringely . June 23, 2005 - No Flash in the Pan
Cringely points out a forthcoming IPO. His opinon is interesting, and it might be worth a closer look.

NeuStar, which is based in Northern Virginia near Washington, DC, generates telephone numbers and has a monopoly to do so through 2015. This function used to be handled by Telcordia (formerly Bellcore) until Telcordia bought the IntelSat satellite network and was forced to spin off NeuStar. These are all of course (with the exception of IntelSat) remnants of the old AT&T Bell System.

NeuStar is the key to telephone number mobility. If you change phone companies in North America but want to keep your old number, NeuStar enables that. NeuStar also generates new phone numbers for all traditional land and mobile phone companies, and just lately, for VoIP phone companies, too.

VoIP providers like Vonage and Packet8 have, up until now, bought blocks of unused phone numbers from local phone companies, who had, in turn, bought them from NeuStar. VoIP pioneer Pulver, for example, recently was doling out numbers originally assigned to InMarSat. Then someone at NeuStar wondered why their phone company customers should be making a profit arbitraging phone numbers when NeuStar could sell them directly to the VoIP companies? So that's what they did.

The reason I mention this is because NeuStar is almost unknown, and within a couple of months, will be having its IPO, taking the company public. With the exception of Google, this hasn't been such a great decade yet for IPOs, so when I see what's likely to be a good one, I try to point it out. NeuStar, with a 10-year guaranteed monopoly, is a good one. It's the only VoiP company, in fact, that looks like a sure thing.