& cplSiteName &

Amdocs Buys Into Content Delivery

Ray Le Maistre
4/18/2006
50%
50%

Billing systems giant Amdocs Ltd. (NYSE: DOX) is buying content download system vendor Qpass Inc. for $275 million in cash, a move that further highlights the growing importance to the telecom services world of content delivery platforms. (See Amdocs to Buy Qpass.)

Qpass is a supplier of software that enables wireless operators such as Cingular Wireless , Sprint Corp. (NYSE: S), and T-Mobile International AG to sell and deliver digital content, such as ringtones and games, to their customers. It also provides a managed service for carriers and acts as a services strategy consultant for telecom operators and content owners such as Sony Corp. (NYSE: SNE), ESPN, and HBO.

Such systems have long been important to mobile carriers, but with fixed-line operators keen to find ways of increasing revenues from their broadband customers, digital content delivery capabilities are quickly becoming relevant to a wider customer base, with VOIP specialist Skype Ltd. a recent example. Skype is using Qpass to sell "original pictures, sounds, and ringtones" as part of its new Personalise Skype service. (See Skype Launches New Version.)

The move pitches Amdocs squarely up against VeriSign Inc. (Nasdaq: VRSN), which made two acquisitions in the content delivery sector during March. (See VeriSign Acquires M-Qube and VeriSign to Buy Kontiki.)

On a conference call today, Qpass's CEO and founder, Chase Franklin, said his company's technology has enabled 480 million transactions worth $1.2 billion in total. He noted that, while ringtones still dominate the download sector, they only account for about 50 percent of current transactions handled by Qpass's technology, with games accounting for about 19 percent, graphics (such as screen savers) about 15 percent, and videos to mobile phones already accounting for about 2 percent.

Amdocs believes there's plenty more to come. The billing and CRM giant believes there is massive growth in the digital download market and reckons the market can grow from being worth $15 billion in 2005 to as much as $70 billion in 2009 as fixed and cable operators find they need such systems.

That's why it's prepared to pay more than six times revenues for Qpass, which generated $42 million in sales in 2005. That's growing though, with Amdocs saying the current quarterly run rate is at $12 million to $15 million. While the companies didn't discuss Qpass's profitability, Merrill Lynch & Co. Inc. analyst Tal "Too Tal" Liani estimates that Qpass lost between $5 million and $7 million in 2005.

The acquisition is expected to be dilutive by $0.01 or $0.02 in the current fiscal year, which ends in September, and accretive thereafter, and is expected to close before the end of June 2006. It's unclear how many of Qpass's 300 staff will be retained.

The move pleased investors, with Amdocs's share price edging up 25 cents, (8.3%), to $3.25 in pre-market trading this morning.

The deal will have also pleased Qpass investors such as Oak Investment Partners , Venrock Associates , and SeaPoint Ventures , and others, which have pumped more than $38 million into the firm.

And if there's any truth behind a recent posting on John Cook's Venture Blog, the purchase price may have been hiked up by rival bids from other interested parties, including Verisign, Openwave Systems Inc. (Nasdaq: OPWV), and Lucent Technologies Inc. (NYSE: LU).

Amdocs declined to comment on whether it had been involved in a competitive bidding process, while Qpass spokespeople were unavailable.

— Ray Le Maistre, International News Editor, Light Reading

(1)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
digits
50%
50%
digits,
User Rank: Light Beer
12/5/2012 | 3:56:54 AM
re: Amdocs Buys Into Content Delivery
If it's correct that Lucent was among the other companies interested in Qpass, maybe it should have bid higher. There are surely decent margins to be had here, and Amdocs is an aggressive company that's used to winning. One to watch.
From The Founder
Cisco's Conrad Clemson, recently promoted to head up the company's Service Provider Apps & Platforms developments, talks to Light Reading's Founder and CEO Steve Saunders about how he's bringing cloud video, mobile and virtualization together to empower network operators.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Interviews
Heavy Reading: The Web-Scale View

1|18|17   |     |   (0) comments


At Light Reading's 2020 Vision Executive Summit in Rome, Heavy Reading's former chief analyst Patrick Donegan shared insight from the recent web-scale operators report, which featured research on how web-scale operators view the market, the best web-scale companies to ...
LRTV Custom TV
Cisco's Cloud Scale Networking: Automation, Virtualization & Simplification

1|18|17   |     |   (1) comment


Cisco's Sanjeev Mervana outlines the latest innovations in networking technology at CES 2017 in Las Vegas.
LRTV Custom TV
ADVA Talks Innovation & the Future of Networking

1|17|17   |     |   (0) comments


Ray Le Maistre and Christoph Glingener, CTO of ADVA Optical Networking, discuss the current state of the industry, cooperation and collaboration, open innovation and the future of networking.
LRTV Custom TV
Cisco's Infinite Video Platform

1|17|17   |     |   (0) comments


Cisco's Infinite Video Platform allows service providers to deliver broadcast-quality video over IP networks. Infinite video supports many devices, from 4K TVs to tablets to game consoles. Join Cisco's Rajeev Raman for a brief tour and live demo.
LRTV Interviews
Masergy: Ability to Adapt Key for NFV

1|16|17   |   6:40   |   (0) comments


Speaking at Light Reading's 2020 Vision in Rome, Masergy's VP, Global Technology, Ray Watson, said agility is key to providing the mix and match NFV-based services that are driving business for the managed service provider today.
LRTV Interviews
Equinix: The Data Explosion

1|13|17   |   4:16   |   (0) comments


At Light Reading's 2020 Vision in Rome, Eric Schwartz, president of EMEA, Equinix, talked about how Equinix is helping its customers manage the influx of data today, and how it's preparing for a future filled with millions of connected IoT devices.
LRTV Interviews
Heavy Reading: The Changing Data Center Landscape

1|12|17   |   6:05   |   (1) comment


At Light Reading's 2020 Vision event in Rome, Heavy Reading's Senior Analyst Roz Roseboro talks about how virtualization is impacting data center evolution and how that evolution is affecting the relationship between service providers, data center operators and public cloud providers.
LRTV Interviews
Boingo: Prepping for Millions of Devices

1|12|17   |   5:07   |   (1) comment


At Light Reading's 2020 Vision in Rome, Boingo's CTO Derek Peterson discusses how wireless operators will address the needs of low-bandwidth and high-bandwidth apps at the same time, the need for more MHz, the impact of IoT and more.
LRTV Interviews
Comcast Shows Off Gig Gateway at CES

1|11|17   |     |   (1) comment


With its largest presence at CES in years, Comcast took the wraps off its long-awaited gigabit gateway and a new platform for managing the home WiFi network. Light Reading Senior Editor Mari Silbey sat down with EVP Chris Satchell to discuss the latest Comcast advance, and met with VP of Product Strategy and Development Andrea Peiro to walk through a demo of the ...
LRTV Interviews
Colt: End-to-End Key for 2017

1|10|17   |   6:21   |   (0) comments


At Light Reading's 2020 Vision Executive Summit in Rome, Nico Fischbach of Colt said having a multi-carrier, end-to-end service proposition is going to be key for 2017 -- and SD-WAN is instrumental in making it happen.
From the Founder
Cisco's Clemson on Mobile Cloud Video

1|9|17   |     |   (1) comment


Cisco's Conrad Clemson, recently promoted to head up the company's Service Provider Apps & Platforms developments, talks to Light Reading's Founder and CEO Steve Saunders about how he's bringing cloud video, mobile and virtualization together to empower network operators. "If you think about where we're going… whether it's a mobile application, or a video ...
LRTV Custom TV
VMware Telco NFV Solutions – Preparing for 5G & IOT

1|9|17   |     |   (0) comments


Shekar Ayyar, EVP & Corporate Strategy/General Manager of Telco for VMware, discusses VMware's Telco NFV solutions role and foundation for the Imminent Arrival of 5G & IOT.
Upcoming Live Events
March 21-22, 2017, The Curtis Hotel, Denver, CO
May 15-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
A Women in Comms Glossary
Sarah Thomas, Director, Women in Comms, 1/18/2017
Is Cable One Beefing Up for Slaughter?
Alan Breznick, Cable/Video Practice Leader, Light Reading, 1/20/2017
Google Security Lessons for IT
Curtis Franklin, Security Editor, 1/18/2017
TV's Paradox: No HDR Without 4K
Mari Silbey, Senior Editor, Cable/Video, 1/17/2017
Nokia CTO: 2017 Is the Year 5G Gets in the Field
Dan Jones, Mobile Editor, 1/19/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Light Reading founder and CEO Steve Saunders chats with Sportlogiq CEO Craig Buntin about sports data analysis.
Eyal Waldman, CEO of Mellanox Technologies, speaks to Steve Saunders, CEO of Light Reading, for an exclusive interview about the 100 GB cable challenge, cybersecurity and much more.
Animals with Phones
You've Heard of Slow Food? Click Here
This is slow tech.
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.