Small Buys By Csg, Connexn Portend Sector Consolidation

Small Buys By Csg, Connexn Portend Sector Consolidation

Byline: Tim McElligot

Compared with its $300 million acquisition of Kenan Systems in late 2001, CSG Systems’ purchase of Toronto-based Davinci Technologies seems like small potatoes. But the deal, which closed at the end of December, is indicative of both a determination by CSG to compete in global markets and a possible resurgence of the electronic billing presentment and payment (EBPP) space.

Davinci provides EBPP and self-care solutions optimized for wireless operators where Kenan has significant international market share. Its customers include Bell Mobility, Qwest Communications and AT&T Canada. CSG will re-brand the Davinci products as CSG Total Care and will offer them as modular, licensed solutions that can be pre-integrated with the Kenan system or sold separately.

Davinci co-founders Alan Lysne and Steve Rodin will both join CSG, as will most of its 15 employees who will remain in the Toronto facility.

“To date, there hasn’t been a great solution with EBPP and self-care pre-integrated with the billing system,” said Lysne, who becomes the executive director of development for CSG. “And that has held some service providers back [from deploying].”

The acquisition will allow CSG to offer a pre-integrated solution by the second quarter, according to Steve Borelli, executive director of product management. The purchase also provides the company with an offering designed for international deployment.

“One advantage of Davinci is that, from the ground up, it was built as an international, multilingual, multi-currency application,” said Lisa Cebollero, analyst for billing and payment application strategies at The Yankee Group. “It will help CSG take the application worldwide.”

Along with this acquisition, there are other signs that electronic billing and customer care is on the rise. In its latest survey, The Yankee Group reported that 6% of interexchange carrier customers viewed and 5% paid their bills online. About 5% of local exchange carrier customers also are paying their bills online. That’s up from industry estimates last year of approximately 2% to 3%. The customers of Internet-based companies have traditionally had a 12% adoption rate for online payments.

Carriers are starting to believe, Borelli said. “Over the years this has been an emerging technology as far as adoption. But we are seeing customers all across our vertical markets picking up on it,” he said.

And they’re passing it along to consumers. “Vendors and carriers have put forth a lot of effort lately in making consumers aware of these applications and in educating and updating them about the security and benefits of EBPP,” Cebollero said.

Service providers see a few benefits themselves, including lower costs for printing and postage, payment collection, fewer calls to call centers and more customer interaction.

Connexn Technologies, a Westminster, Colo.-based revenue assurance provider, hopes carriers also realize the benefits of its acquisition this week of Telecomms Consultancy & Solutions in the U.K.

Since 1992, Connexn has provided solutions that stop revenue leakage primarily in the area of service activation, which accounts for about 30% of the revenue lost annually by North American wireline carriers. TCS focuses on plugging the leak in the area of usage data, which accounts for approximately 25% (see figure).

“Revenue assurance has become a major initiative at the C-level of every company,” said Gary Ross, vice president of product management and marketing at Connexn. “But the CFO’s biggest problem in making a revenue assurance decision is knowing how bad the problem is. Now we can leverage the two companies to do a more complete analysis.”

In addition to greater access to the European market, TCS provides Connexn with new capabilities in the data usage area including audit record generation and mediation, billing reconciliation and least cost routing.

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