CNN reports that US mobile carriers are obstructing manufacturers’ attempts to implement a ‘kill switch’ for their smartphones. The aim of a kill switch is to render a phone inoperable if the rightful owner no longer has possession, hence discouraging theft. The implementation of kill switches is being promoted by a number of state attorneys, under the collective campaign banner of Secure Our Smartphones. However, CNN’s reporters suggest that a kill switch feature might indirectly hurt telco profits, by lowering demand for handset insurance.
Archive for the News Category
27 11 2013
People often ask me difficult questions, which require me to give evasive answers. Questions like…
… and …
But sometimes, I get asked really easy questions.
So that was pretty much the conversation I had with Alex Leslie and Tony Poulos of Billing Views. Which proves I can keep it short, when I know the answer to the question.
If you have not read Billing Views recently, I have two questions for you:
We are talking about a great publication with lots of readers. It has a higher Alexa ranking than any of its rivals, and every week it has lots of content that ventures well beyond billing. In fact, I think I will be mostly writing for the ‘beyond’ bit, which includes topics like revenue assurance, data integrity, business strategy, and whatever rubbish I usually write about.
… and …
When the guys at the helm are Alex Leslie and Tony Poulos, both of whom have a fabulous track record in media, you know that is a vehicle you want to board. Alex was the founder and CEO of the Global Billing Association, the first organization to introduce benchmarking for revenue assurance. He has written for a wide range of communication magazines and was a contributing editor for Connected Planet. Tony has founded and managed software and services companies, and is the former head of the TM Forum’s Revenue Management initiative. In 2011, Tony was voted one of the 25 most influential people in the telecom software industry. So when these guys have some news and views to share, it is worth taking notice…
I am glad you asked me that. My first post covers how changing systems at UK utility Npower resulted in a flood of complaints, and what this says about the need for a new breed of assurance. I argue that assurance practitioners need to become more predictive, allowing them to add more value to change management, whilst also anticipating the causes and cost of customer complaints. You can read it here.
25 11 2013
Unlike market leaders WeDo and Subex, analysing Israeli RA vendor cVidya always causes me headaches. For example, they tell their customers they are headquartered in the USA, but they submit their figures to a Deloitte ranking for fast-growing companies headquartered in Israel. But cVidya are backed by venture capital, which means they are under no obligation to tell the public anything about their results, never mind telling the truth. So over the years, I have relied upon piecing together scraps of data from here and there, not least from the numbers reported by cVidya to Deloitte’s Israeli Fast 50. cVidya once again features in the Fast 50 for 2013, being ranked 29th fastest growing firm in Israel. This was achieved by delivering 175% revenue growth between 2008 and 2012. And from that, I estimate they probably suffered a 20% fall in sales between 2011 and 2012, with revenues dropping from around USD52mn to around USD42mn.
Archimedes said: “give me a place to stand on, and I will move the Earth.” He was discussing the principle of leverage, which seems oddly appropriate. To calculate cVidya’s revenues from the Israeli Fast 50 numbers requires two fixed points, for security. Then we can plot the curve of cVidya’s growth over time. After following cVidya for ten years, I finally have two fixed points suited to the task.
The crucial first point is found way back in 2004. We know, with a very high degree of certainty, that cVidya’s 2004 revenues were just less than USD63k. How do we know this? Because in 2008, cVidya received a ‘special mention’ from Deloitte, despite failing to qualify for their Fast 50 Index. At the time, cVidya was very proud of this, and issued a press release. Why did they fail to qualify? It had nothing to do with arguments about where their headquarters were. The growth of a Fast 50 business is always measured over a 5-year span. cVidya’s 2004 revenues fell below the USD63k threshold to be included in the Fast 50 ranking.
Step forward to 2009, when we can be confident that cVidya’s revenues were around USD20mn. The backers of cVidya and ECtel negotiated their merger, there was good evidence that the two firms had roughly equal revenues, and ECtel’s revenues were in the public domain by virtue of their stock market listing.
It is important to emphasize that cVidya has never publicly admitted to falling revenues. They have, in contrast, often stated they were growing. So if the 2009 revenues were higher than the 2008 revenues, and the 2012 revenues are 175% higher than the 2008 revenues, we know that 20*(1+1.75) = USD55mn would be the high end of the range of possible 2012 revenues. But this would assume negligible growth between 2008 and 2009. This is unlikely. At the time, cVidya frequently reported new sales and were very upbeat about their growth. So the more that cVidya grew between 2008 and 2009, the lower their 2012 figure would be. I came up with the following growth estimates, based on the Fast 50 numbers and by setting the 2004 revenues and 2009 revenues to USD63k and USD20mn respectively.
Numbers below the red line are for the post-merger cVidya, incorporating ECtel. Numbers above the red line are estimates of growth between USD63k in 2004 and USD20mn in 2009. From 2009, all revenue estimates are consistent with the 5-year growth figure reported in the Fast 50.
There is some guesswork here, but the numbers make sense. Crucially, it would be very hard to engineer a model to fit Deloitte’s Fast 50 numbers, without showing cVidya had a downturn somewhere. In the past, cVidya have talked big about their growth. This year, they were quiet about growth. Hence, I make the rational assumption that the start-up did grow impressively during its early years, but it plateaued following the merger with ECtel. If the model is wrong, there are only two ways to find out: wait for the figures in next year’s Fast 50, or wait for cVidya to be more transparent about their financial performance. I know which I think will come first.