Archive for June, 2012

WeDo, the Portuguese business assurance vendor, has announced a deal to provide a managed revenue assurance service to ‘one of the largest carriers in the United States’; see here for the press release.

Details are scant, with neither the customer nor the price being disclosed. However, it is understood that WeDo’s RAID product will be deployed in a hosted datacentre managed by WeDo, and will be integrated with the operator’s existing systems.

Strong indications are that this deal is the first fruit from WeDo’s recent acquisition of Connectiv Solutions. Connectiv Solutions was an established US business that already listed some of the largest US service providers amongst their customers. If Connectiv’s team and existing base can propel WeDo’s business assurance offerings into top tier US carriers, this would strengthen WeDo’s position in comparison to its biggest global rivals. For WeDo and its main competitors, the US market has proven tough to crack. This means there continues to be significant potential for increasing revenues from US carriers, which could be crucial to long-run profitability as sales from other regions slow or reach a plateau. Underlining the significance, Brian Silvestri, formerly boss of Connectiv and now WeDo’s VP of Business Development for North America and the Caribbean, commented:

“This announcement highlights the combined strengths of WeDo Technologies and Connectiv Solutions. Our teams are working together, collaborating, and delivering solutions to meet the demands of our North American customers.”

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I have not written much about Connectiva’s seeming collapse because… well, what can I write? The Indian revenue assurance vendor has gone radio silent for an awfully long time. Their few remaining customers keep being told to wait for imminent good news that never seems to arrive. That leaves no official update to share. The unofficial Connectiva employees’ blog provides a limited opportunity to relay the latest rumour, but even this site is only updated sporadically. And the little information in mainstream circulation has proven to be unreliable. Take this from Light Reading India:

Revenue assurance and analytics systems specialist Connectiva Systems is on the brink of being acquired by IT services firm Mara Ison Technologies, Light Reading India has confirmed.

According to a senior executive at Dubai-based Mara Ison, which currently does most of its business in Africa, the deal is set to close in about a week or so.

That was published on May 30th. A week turns into a month, and months turn into… well, even the most patient of customers will eventually snap.

(more…)

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Last week I posted the first podcast of this two-part series. Here is the concluding part, where the panel from WeDo’s 7th Worldwide User Group continue their conversation, bringing their anecdotal history of revenue assurance, fraud management and business assurance up to the present day. Joining me on the panel were Tony Poulos, Andrew Doyle, and Simon Collins. Thanks to them, and to WeDo, for permission to share the recording.

You can download the mp3 file for this podcast from here, or you can listen to it through your browser player. You can also subscribe to it for free, via the iTunes store.

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For a second time, Subex has cut a deal to restructure its financing. Subex’s problems have stemmed from using convertible bonds denominated in US dollars to finance its 2007 purchase of Canadian firm Syndesis. With the share price too low for investors to convert their debt to equity, and the Indian rupee continuing to slide against the US dollar, Subex first bought itself extra time to restructure its old 2% FCCBs, and has now completed an exchange by issuing new FCCBs worth USD131M, at 5.7% and falling due in July 2017. The bond’s floor price of INR22.79 is about 1% below the current share price.

Subash Menon, founder and CEO, sounded a defiant note when he said last month:

The increasing uptake for our industry-changing Revenue Operations Center and Managed Services offering and the non-linearity in the business are clear indicators that we are here to stay

However, the deal has come at some cost to him personally. According to a stock exchange filing, both Menon and Sudeesh Yezhuvath, COO, will lose their ‘golden goodbye’ entitlements in the event of leaving the company. Menon will now step down as Chairman, whilst retaining his other roles. It is not clear who will fill the Chairman’s role.

Subex announced modestly positive results for the financial year ending 31 March 2012. Net profit before exceptionals was up 7.6% on the previous year. Annual product income was slightly up, and represented 90% of revenues. However, this was offset by a fall in revenues from services. Exceptionals deducted USD11M from the bottom line, most of that relating to forex movements, though also including redundancy costs of USD1.2M. Profit after exceptionals was USD7M, down on last year.

The business is fundamentally sound, and it remains in a stable orbit where revenues are roughly in the band of USD100M. This is below the company’s peak but reflects the fact that Subex retains a consistent and solid share of a stable market. The growth potential is significantly lower than the more optimistic market projections that abounded during Subex’s strong growth phase. Unless management can find an unexpected ‘breakout’ offering, they will likely remain under pressure to keep costs low and grind out improved returns in future. Given difficulties faced by rival vendors, Subex may opt to play a waiting game. A realistic strategy would see Subex steadily consolidating its market position by picking up customers from weaker competitors that have an unsustainably low market share or more volatile income streams.

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This May I was asked back to WeDo’s Worldwide User Group (WWUG) event, held at a beautiful resort near Óbidos, Portugal. WWUG is now legendary in the industry, thanks to impeccable organization and top-notch hospitality. Honestly, the quality of WWUG makes me wonder why anyone still bothers going to a mainstream RA conference. But not being a WeDo customer, there was a catch – to be allowed to come, I would have to share some of my opinions with the WWUG audience. Some catch! There are other firms who would fly me to a luxury beach hotel just to stop me talking to their customers.

My fellow panelists were a distinguished bunch…

  • The one and only Tony Poulos was chairman of the panel. B/OSS World recognized Tony as one of the 25 most influential people in telecoms software.
  • Inviting Andrew Doyle surely proves that WeDo hold no grudges. Andrew spent a decade competing against WeDo, holding senior roles at some of their biggest rivals: Connexn, Lavastorm and Connectiva. Since 2010, Andrew has been VP Sales at Telepo.
  • Last but not least, Simon Collins is the General Manager of Praesidium, a business that WeDo acquired in 2007 and have turned into their consulting division. Over a period of 15 years, Simon has helped Praesidium to establish an enviable reputation as deeply knowledgeable specialists in business assurance.

When we got up on stage, somebody in the crowd commented on the combined age of the panel. How rude! But seriously, the panel had a lot of experience from a lot of different perspectives – consultant, vendor and telco management. So Tony decided the perfect topic of conversation would be a review of the history of revenue assurance, fraud management, and what we now call business assurance. And there was plenty to say on the subject! I am happy to say that my fellow guests all gave their permission to share the recording of their conversation. In fact, there was so much to say on the history of RA, that I have had to split the discussion into two parts. Part 1 is available now; you can download the mp3 file for this podcast from here or listen to it through the browser player. Part 2 will be available from talkRA next week. And if you never want to worry about missing the talkRA podcast, you can also subscribe to it for free, via the iTunes store.

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