Starent Networks

Prospectus Summary

PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this prospectus. You should read the following summary together with the more detailed information appearing in this prospectus, including our consolidated financial statements and related notes, and the risk factors beginning on page 7, before deciding whether to purchase shares of our common stock. Unless the context otherwise requires, we use the terms "Starent," "Starent Networks," "our company," "we," "us" and "our" in this prospectus to refer to Starent Networks, Corp. and its subsidiaries.

Starent Networks

Overview

Starent Networks is a leading provider of infrastructure solutions that enable mobile operators to deliver multimedia services to their subscribers. We have created solutions that provide core network functions and services, including access from a wide range of radio networks to the operator's packet core network, mobility management of subscriber sessions and call control. Our solutions provide high performance and system intelligence by combining significant computing power, memory and traffic handling capabilities with a flexible, high availability operating system and other proprietary software. Our access-independent solutions integrate multiple network functions and services needed for the delivery of advanced multimedia services, such as video, Internet access, voice-over-IP, e-mail, mobile TV, photo sharing and gaming.

Mobile operators are aggressively deploying next-generation wireless networks, such as third generation, or 3G, networks, that are capable of delivering high quality, mobile multimedia services to subscribers. In deploying these new networks, mobile operators are seeking packet-based multimedia infrastructure solutions that can deliver high performance, flexibility and simplicity and provide high reliability. We have developed our multimedia core network platform, the ST16 Intelligent Mobile Gateway, and our proprietary software specifically to address the needs of packet-based mobile networks.

We sell our hardware and software products to leading mobile operators around the world both directly and through OEMs, system integrators and distributors. Since our first commercial deployment in the first quarter of 2003, our products have been deployed by over 60 mobile operators in 25 countries. We became profitable in 2005, and in 2006 our revenues were $94.4 million and our net income was $3.6 million.

Industry Background

Mobile operators have been aggressively upgrading their networks for a variety of reasons, including in large part due to increasing mobile subscriber demand for data-rich multimedia services. Several factors are accelerating the growth of data-rich multimedia traffic on mobile wireless networks, including continued growth in the number of mobile subscribers worldwide, an increasingly mobile and interconnected society in which information is accessible and communications are available all the time regardless of location, and a proliferation of mobile devices designed for multimedia services.

In order to deliver a high-quality subscriber experience in this data-rich environment, mobile operators require infrastructure solutions that are able to identify and manage individual communications sessions, handle significant traffic and integrate services. The solutions must also allow mobile operators to simplify and easily upgrade their networks, deliver quality of service, reliability and availability and support multiple modes of access.

Historically, mobile operators seeking to address these challenges have been required to retrofit network infrastructure solutions originally designed for wireline networks. These solutions utilizing repurposed network switches, routers and off-the-shelf enterprise servers are unable to sufficiently satisfy the needs of mobile operators to deliver efficient and reliable multimedia services.

While routers and network switches are capable of forwarding packets of information, they lack the integrated processing power, memory and software needed to examine individual packets and apply defined business policies and subscriber services to them. To address these shortcomings, mobile operators typically connect repurposed switches and routers with numerous enterprise servers in multi-element configurations. These repurposed solutions offer limited intelligence about subscriber sessions, can result in limited network performance and reliability and can be costly to operate and upgrade.

Our Solutions

Our solutions provide six key, integrated capabilities that create enhanced revenue opportunities and facilitate reduced costs for mobile operators:

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Intelligence to shape the subscriber experience. Our integrated solutions combine custom software with significant processing power and memory to conduct a detailed inspection of each subscriber session and to associate that session with a subscriber need, operator service requirement or operator business policy.


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High performance. Our solutions are highly scalable to support a large number of subscribers on one platform and provide high bandwidth and throughput for improved traffic capacity and flow. In addition, our solutions provide high call transaction rates, which enhance the scalability of our products, reduce unwanted delays in network traffic and allow the subscriber to have quick access to network services.


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Simple and flexible network architecture. Our solutions allow mobile operators to integrate a number of network functions and enhanced services into a single hardware platform. In addition to providing network functions such as access, mobility management and call control, our platform is also capable of integrating advanced services that are typically deployed out of line from the session stream elsewhere in the network, such as enhanced charging and billing, firewall protection, security and content filtering.


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Reliability and redundancy. Our system architecture provides a high level of resiliency and protects the subscriber's experience because all of our platform's system resources, including those used for redundancy, can be shared. Our platform employs hardware redundancy as well as high-availability software techniques, such as session recovery, fault containment and state replication.


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Access independence. Our solutions are capable of supporting multiple modes of access, including CDMA and GSM/UMTS, which are the two principal radio access technologies in use today. This capability allows mobile operators to deliver a uniform service experience to subscribers from a single platform, simplifying the network and limiting operator costs.


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Well positioned for future technology upgrades. While designed for use in today's mobile networks, our solutions are also readily upgradeable to respond to evolving mobile operator environments or requirements and new technologies. Our platform can typically provide new network functions or enhanced services through a software upgrade.

Our Strategy

Our goal is to strengthen our leadership in the mobile network infrastructure market. Principal elements of our strategy include the following:

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Extend our technological leadership. We believe we have a market leading solution today, and we will continue to invest in research and development to maintain our leadership position through the introduction of new products and enhancements to existing products.


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Increase market penetration. As mobile operators continue to increase network coverage and capacity, as well as their service offerings, they create new sales opportunities for us.

We intend to increase our market penetration of both CDMA and GSM/UMTS operators. We believe a significant opportunity for growth is from sales to GSM/UMTS operators as they continue to transition to high-bandwidth networks.

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Expand into evolving markets. We plan to address new radio access network architectures and technologies and leverage our solutions' access independence — the flexibility and power to deploy a single hardware platform across multiple access architectures and technologies.


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Increase the number of features. We plan to continue to develop new features based on specific customer requests and anticipated market needs.


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Expand our sales channels. We intend to expand our existing relationships with mobile operators, pursue new direct and OEM, system integrator and distributor relationships to sell our products and expand our direct sales force.


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Continue to offer a high level of support. We believe one critical factor of our success has been our focused support and technical expertise. We intend to continue to offer a high level of customer support.

Risks Associated with Our Business

Our business is subject to numerous risks and uncertainties, as more fully described under "Risk Factors" beginning on page 7, which you should carefully consider prior to deciding whether to invest in our common stock. For example:

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we compete in new and rapidly evolving markets and have a limited operating history, which makes it difficult to predict our future operating results;


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our past operating results have fluctuated significantly, and likely will continue to fluctuate significantly, which makes it difficult to predict our operating results and could cause our operating results to fall below expectations;


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we depend on a limited number of customers for a substantial portion of our revenues, and the loss of a key customer or any significant adverse change in the size or terms of orders from a key customer could significantly reduce our revenues;


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we rely on a single line of products focused on a single market, and if the market for those products does not develop as we anticipate, our revenues may decline or fail to grow, which would adversely affect our operating results; and


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the market in which we compete is highly competitive and competitive pressures from existing and new companies may have a material adverse effect on our business.

Corporate Information

We were incorporated in Delaware in August 2000. Our principal executive offices are located at 30 International Place, Tewksbury, Massachusetts 01876, and our telephone number is (978) 851-1100. Our website address is www.starentnetworks.com. Information contained on our website is not incorporated by reference into this prospectus, and you should not consider information contained on our website to be part of this prospectus or in deciding whether to purchase shares of our common stock.

"Starent," "ST16," the Starent Networks logo and other trademarks or service marks of Starent Networks appearing in this prospectus are the property of Starent Networks. This prospectus contains additional trade names, trademarks and service marks of other companies.

The Offering

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The number of shares of our common stock to be outstanding after this offering is based on the number of shares of common stock outstanding as of December 31, 2006, and excludes:

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11,846,085 shares of common stock issuable upon the exercise of stock options outstanding as of December 31, 2006, at a weighted average exercise price of $0.94 per share, of which options to purchase 4,568,075 shares of our common stock were exercisable as of December 31, 2006 with a weighted average exercise price of $0.54 per share; and


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837,863 shares of common stock available for future issuance under our equity compensation plans as of December 31, 2006.

Except as otherwise noted, all information in this prospectus:

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assumes no exercise by the underwriters of their over-allotment option;


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gives effect to the conversion of all outstanding shares of our convertible preferred stock into 66,432,011 shares of our common stock upon the closing of this offering; and


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gives effect to the restatement of our certificate of incorporation and amendment and restatement of our bylaws prior to the closing of this offering.

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