'We strive to think three steps ahead' [Globes, Tel Aviv, Israel]
(Globes (Tel Aviv) Via Acquire Media NewsEdge) Feb. 13--Once every few years, Amdocs Ltd. (NYSE: DOX) launches a new version of its flagship CES (Customer Experience Systems) product. Amdocs, which provides software solutions for billing and for customer service and management for telecommunications companies, launched an updated version, the ninth, for CES last week. The system includes business and operations support (BSS and OSS) systems, alongside network control capabilities. Amdocs is clearly excited about the capabilities of the new version.
"We see this as a breakthrough version," says Amdocs head of global marketing Dana Porter (40), talking to "Globes". "It comes against a background of fairly dramatic changes that have taken place in the industry in the past year or two. Customers expect much faster service, tailored to them personally. In Israel, for example, the regulations require calls to customer service to be answered within three minutes. Apart from that, a survey we carried out showed that 40 percent of customers are prepared to pay a premium for the ability to consume all services and applications on all their devices smartphone, tablet, and computer, of everyone in the extended family."
On the other side are the telecommunications providers, who, says Porter, "are in a race to meet the demands of the end-customers." Porter points out that the volume of data transfer on the network is expected to grow 15-fold in the period 2012-2016, mainly because of video. "Telecommunications providers are rolling out fourth generation (LTE technology) networks, and now the challenge is like this: after investing so much money, how do they make a return on it " says Porter. This is where Amdocs comes in, she says. For example, when AT&T, the largest telecommunications provider in the US, and Amdocs' largest customer, launched the iPhone 5 on its network, Amdocs helped it to build the pricing programs.
These days, it seems that it's less important to subscribers whether they are with Cellcom, Pelephone or Orange, and more important whether their handsets are Apple or Samsung, for example.
"That's half true. The end-customer's loyalty and preference is towards a specific handset or manufacturer. But still, we see around the world that a telecommunications provider can do a lot to distinguish itself from the competition. One of the things that are measured is the likelihood that the end-customer will recommend you. The industry average is 22 percent, compared with 30-40 percent in the vehicle or software industries, so that it's correct to say that this is an industry in which it's difficult to make customers stay loyal."
One of the methods for creating customer loyalty is personalization the ability, as Porter describes it, to guess the customer's needs before he or she knows what they are. "Let's say that from month to month your consumption is similar, and suddenly there's a spike," she says, "Amdocs' software makes it possible to detect this, to contact the customer, and offer a better plan."
Something else that Pelephone customers have recently been exposed to, and, two years ago, Cellcom customers as well, is severe network breakdowns. "Why shouldn't a telecommunications provider inform the subscriber pro-actively, or compensate the subscriber in some way that is significant for him or her " Porter suggests.
For its part, Amdocs has nothing to do with fixing network breakdowns. "We are not network players," Porter says, "We are proud of the fact that we are agnostic, and that it makes no difference to us if it's an Alcatel, Huawei, or any other kind of network. Although Amdocs won't help to prevent the breakdown, it will provide insight into what to do with what happened, and how to improve the customer experience."
Why in your opinion have investors still not been all that enthusiastic about CES 9
"I think that the market believes in the direction in which the CEO, Eli Gelman, is taking the company, and CES 9 is another milestone. We are constantly striving to guess three steps ahead what the market needs. Most telecommunications providers need to undergo a transformation, and Amdocs is their natural partner."
Amdocs is a natural partner mainly for the large carriers; less so for small and mid-size carriers.
"Really not. It's true that we have relationships going back years with the big telecommunications providers, but today we have customers of all sorts and sizes, even customers with only a million subscribers."
"Slowdown in Europe, growth in Asia"
Amdocs' financial statements for its first quarter of 2013 (ending in December) were released a few days ago. The company's revenue rose 2.4 percent in comparison with the corresponding quarter to $826.4 million, and non-GAAP grew by 7.3 percent to $119.4 million.
The quarter saw improvement in North America, mainly thanks to AT&T, but the situation in Europe is far from exciting. Revenue in Europe fell 10.1 percent, totaling less than $100 million. "Europe is simply a little more cautious, but we aren't seeing projects halted, but only a slowdown," says Porter, "Sales and project cycles are longer, but, despite the macro-economic conditions, our projects continue."
By contrast, in the emerging markets and the US there are trends supporting market growth. "In Asia, the market is growing extraordinarily, but ARPU, average monthly revenue per user, is very low. The telecommunications providers need relatively low-cost systems, with a fast time-to-market. In the emerging markets too there is rapid growth. We recently won a project with Claro Chile. In the US, there is high investment in fourth generation networks, and there they are looking for systems that put the subscriber in the center," Porter says.
In the past, mergers and acquisitions among telecommunications providers were an important growth engine for Amdocs. Its customers consolidated systems of companies that they acquired, and often chose Amdocs as their provider. Porter mentions the forthcoming merger of US carriers MetroPCS and T-Mobile USA, both of them Amdocs customers, and also the attempt by Softbank of Japan to take over US carrier Sprint. "This activity represents good news for Amdocs, because it generates work for us," says Porter.
(c)2013 the Globes (Tel Aviv, Israel)
Visit the Globes (Tel Aviv, Israel) at www.globes.co.il/serveen/globes/nodeview.asp fid=942
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