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BSS Blues for Comverse

Ray Le Maistre
12/14/2012
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Service Provider Information Technology (SPIT) vendor Comverse Inc. (Nasdaq: CNSI) has just published its first quarterly earnings since it was spun off as an independent telecom software supplier from its former parent, Comverse Technology, at the end of October, and they make for a sobering read. (See Independence Day for Comverse and Comverse Plans for Independence.)

For its fiscal quarter ending Oct. 31, the company generated revenues of $185.2 million and posted a net loss of $10.6 million. And although it's a newly independent company, it is able to provide comparative numbers for the same period a year ago, which show how it has suffered a 24 percent dip in sales and slipped from a profit to a loss.

You can see the full financials by clicking here.

Of particular concern is the performance of the BSS software unit, which saw its revenues dip by 44 percent year-on-year to $65.9 million and its gross margin slip to 29.4 percent from 44.9 percent.

CEO Philippe Tartavull, who was appointed earlier this year, has been hiring new blood to help retain Comverse's status as one of the more influential firms in the BSS market, which is in something of a state of flux at the moment. (See Comverse Gets a New CEO, Comverse Appoints Senior Execs, Redknee to Pay $52M for NSN's BSS Unit and What Will Redknee Get From NSN's BSS Biz?)

Tartavull will need a few more quarters under his belt before his impact can be judged, but by the second half of 2013 we should be able to see whether Comverse has the chops to survive and thrive in its new guise.

For more on the BSS sector:



— Ray Le Maistre, International Managing Editor, Light Reading

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