opinion


Intec could prove to be CSG’s salvation

China Mobile has teamed up with infrastructure vendor Huawei to demonstrate the world’s first international VoLTE HD voice and video calls between a TDD LTE network and a FDD LTE network

After whisperings in the industry about possible take-overs by various unnamed suitors, the buy-out of billing system vendor Intec finally looks set to be more than just a rumour this time around. US BSS vendor CSG has laid £236.7m on the table in a bid to acquire the UK company and so haul itself back into the international telecoms support systems market.

The UK company has been suffering lately from poor financials due to lost orders and a reluctance on the part of network operators to invest in new IT systems, so rumours of a buy-out were inevitable, however this time around, things are out in the open and both sets of seniors are recommending acceptance. The deal is not yet sealed though and other contenders have been mooted among those with an IT offering in the telecoms vertical. Names such as IBM and Oracle are being bandied about and while such major players might be salivating over Intec’s enviable client list, it’s hard to see how either would integrate the billing vendor’s portfolio into their own product ranges. Indeed, Oracle effectively opened its telecoms play with the purchase of Portal Software in 2006. At the time, Portal had a very credible converged, real-time billing platform which the database giant has continued to develop as the centerpiece of its communications product portfolio.

If counter-bids are made, CSG is very likely to respond as it not only wants a stronger market presence outside the US, but it also needs an up-to-date, real-time convergent billing platform with which to compete with the likes of Amdocs and Comverse. Ironically, CSG sold its Keenan billing platform to Comverse back in 2005 and retreated back to the U.S. cable market where it has since been winning contracts mainly for workforce management systems and CRM. CSG significantly bolstered its CRM offering in 2009 with the $39m cash acquisition of DataProse, but the company probably feels that without a serious billing capability, its portfolio is weak at a time when real-time charging and rating is beginning to emerge as a core component in the delivery of mobile data services.

In addition, CSG’s presence in the US, the only geographical region in which it has won more contracts than Intec, is under pressure as CSG’s traditional clients, the cable operators, are beginning to rebrand themselves as MSO’s, offer triple- and quad-play services and are starting to resemble full-blown telecommunications service providers. Meeting the demands of US cable operators is not the niche market it was even four or five years ago and even CRM is being subsumed into the broader concept of customer experience management, so CSG is under considerable pressure to bring its portfolio up to date.

There is no doubt that CSG would benefit from acquiring Intec’s customer base and product portfolio more than most other potential suitors, indeed the company’s long-term survival could depend upon the deal going through. The question is however, does it have deep enough pockets if someone else starts a bidding war?

Tags: , , ,

Leave a comment

Your email address will not be published. Required fields are marked *

Polls

What is your name?

Loading ... Loading ...