Light Reading

NEC to Buy Convergys Unit for $449M

Ray Le Maistre
3/22/2012
50%
50%

NEC Corp. (Tokyo: 6701) subsidiary NetCracker Technology Corp. , already one of the biggest Service Provider Information Technology (SPIT) vendors in the world, is set to get even bigger with the planned acquisition of Convergys Corp. (NYSE: CVG)'s Information Management telecom software business unit for US$449 million.

The Information Management unit, which has about 2,500 staff and about 150 customers, is a well established supplier of billing, customer care and revenue management systems to utility and logistics companies as well as to mobile, fixed-line and cable operators. (See Convergys Launches CRM 2.0, Convergys Touts Progress With Telekom Deutschland, SmarTone Upgrades Convergys BSS, Cox Reups With Convergys and Orange Austria Picks Convergys.)

In 2011, Convergys's Information Management unit generated revenues of $328.8 million, down 3 percent year-on-year, and operating income of $37.2 million, up 12 percent compared with 2010.

When it announced its full-year 2011 results on Feb. 7, Convergys estimated full-year 2012 revenues for the Information Management unit of $330 million to $340 million, a slight year-on-year increase.

The acquisition is expected to close during the second quarter of 2012.

The Information Management will become part of NetCracker, which currently boasts a broad range of OSS capabilities and significant (but unspecified) annual sales of hundreds of millions of dollars, the bulk of which comes the NEC network management systems the Japanese vendor folded into NetCracker following its acquisition in June 2008. (See NetCracker Flexes Its SPIT Muscle, SPIT Watch: CA, NEC Bulk Up and NEC Shells Out $300M for NetCracker.)

NetCracker added to its OSS assets in 2011 with the acquisition of Subex Ltd. 's IP service fulfillment business line, though that was a relatively small transaction. (See Subex Offloads Its Problem Child.)

NEC's rationale for buying the Convergys unit is that, once the deal is closed, it will be able to offer communications service providers (CSPs) and enterprises a full range of OSS and BSS tools that can be deployed by the customer, offered as a managed service or provisioned as a cloud service.

Why this matters
The deal makes NetCracker not only one of the biggest SPIT vendors globally but one of the few that would be able to offer such a broad range of operation and business support tools, making it a stronger rival to the likes of Amdocs Ltd. (NYSE: DOX) and Oracle Corp. (Nasdaq: ORCL).

The deal will also strengthen NetCracker's proposition in other vertical sectors that it has already been targeting, such as utilities. (See NetCracker Looks Outside Telecom and NetCracker Wins Utility Deal.)

In terms of the broader market, the move extends the gap between the major telecom software vendors, such as Amdocs, Comverse Inc. (Nasdaq: CNSI), Ericsson AB (Nasdaq: ERIC) (following its acquisition of Telcordia), HP Inc. (NYSE: HPQ), IBM Corp. (NYSE: IBM) and Oracle, that can offer a broad range of products and support R&D operations from their cashflow, and the hundreds of smaller SPIT players that have targeted products.

With the emphasis more and more on providing CSPs with broader packages of integrated capabilities, the likes of NetCracker are likely to get stronger, while the smaller, vendors are likely to find it even tougher to generate new business.

For more

— Ray Le Maistre, International Managing Editor, Light Reading

(0)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
From The Founder
Light Reading sits down at CES with the head of Cisco's service provider video business, Conrad Clemson, to discuss how NFV and cloud security relate to video, the challenge of managing 4K/8K traffic, the global expansion of Netflix and virtual reality.
Flash Poll
Live Streaming Video
CLOUD / MANAGED SERVICES: Prepping Ethernet for the Cloud
Moderator: Ray LeMaistre Panelists: Jeremy Bye, Leonard Sheahan
LRTV Custom TV
Join Us at the Digital Operations Transformation Summit

2|4|16   |   03:52   |   (0) comments


The Digital Operations Transformation Summit on February 21, 2016 at the Crowne Plaza Barcelona Fira Centre will bring together 50 senior executives to engage in a unique debate on the opportunities and challenges presented by the transformative evolving digital landscape. RSVP now at events@lightreading.com.
LRTV Custom TV
Making the Test: ADVA Ensemble Connector vs. Open vSwitch

2|4|16   |   01:28   |   (0) comments


Light Reading, in partnership with EANTC, recently tested ADVA's Ensemble Connector, which replaces open vSwitch and offers carrier-grade capability and interoperability. The test results strengthen ADVA's credibility as a provider in the virtualization space.
LRTV Custom TV
Bridging the Gap Between PoCs & Deployment in NFV

2|4|16   |   31:50   |   (0) comments


Charlie Ashton of Wind River presents the keynote at Light Reading's 2020 Vision executive summit in Dublin.
Between the CEOs
CEO Chat With Mike Aquino

2|3|16   |   17:34   |   (0) comments


The former CEO of Overture Networks, Mike Aquino, discusses why truly open virtualization solutions provide service providers with the greatest choice.
Shades of Ray
MWC: Buckle Up for 5G & the IIoT

2|2|16   |   02:28   |   (0) comments


This year's Mobile World Congress looks set to be a 5G land grab and a chance to get down and dirty with the Industrial Internet of Things (IIoT) – but what will the 5G discussions actually be about?
LRTV Custom TV
Case Study: Building China's Next-Gen TV Networks

2|2|16   |   5:01   |   (0) comments


With over 2 billion viewers worldwide, Shenzhen Media Group is one of China's largest content producers. By partnering with Huawei and Sobey, SZMG was able to modernize media operations with the Converged News Center, a production studio that is a model for next-generation workflows.
LRTV Custom TV
Quad Channel Modulator Driver with 46 Gbaud Capability from MACOM

1|28|16   |     |   (0) comments


MACOM's MAOM-003427 is the industry's first surface-mount modulator driver with 46 Gbaud capability to support next generation 200G and 400G applications.
LRTV Custom TV
Video Infographic: Validating Cisco's NFV Infrastructure

1|26|16   |   02:24   |   (1) comment


We all know that the network of the future will be virtual, but when will virtual become a reality? This video infographic covers the four key areas in which Light Reading, in partnership with EANTC, tested Cisco's NFV infrastructure: performance, reliability, multi-service capabilities and single pane of glass management.

For the full report, see

Between the CEOs
CEO Chat With Phil McKinney, CableLabs

1|22|16   |   13:36   |   (1) comment


At CES in Las Vegas, we met with Phil McKinney, CEO of CableLabs. Phil provides an update on the rollout of DOCSIS 3.1, his views on the future of open source and how consumer interest in virtual reality could affect network traffic.
Between the CEOs
Ericsson CTO on the Changing Telecom Market

1|21|16   |   10:26   |   (0) comments


At CES 2015, CTO of Ericsson, Ulf Ewaldsson, sits down with CEO of Light Reading, Steve Saunders, to discuss the changing telecom market, the new partnership with Cisco and the future of the telecom industry.
LRTV Interviews
Ireland's Data Dream

1|21|16   |   14:31   |   (0) comments


Host In Ireland president Gary Connolly tells Light Reading's Steve Saunders about the role Ireland is playing in hosting data for the world's largest organizations.
LRTV Custom TV
Brocade Keynote: Transitioning to the New IP

1|20|16   |   27:23   |   (0) comments


At 2020 Vision in Dublin, Andrew Coward, VP of Service Provider Strategy at Brocade, presents the transition to the New IP.
Upcoming Live Events
March 10, 2016, The Cable Center, Denver, CO
April 5, 2016, The Ritz Carlton, Charlotte, NC
May 23, 2016, Austin, TX
May 24-25, 2016, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
Cisco's latest VNI numbers suggest the world will be using 366.8 exabytes of data on smartphones and Internet of Things devices, up from 44.2 exabytes, in 2015.
Hot Topics
Alphabet Is Serious About Google Fiber
Mari Silbey, Senior Editor, Cable/Video, 2/1/2016
Did Juniper Pay 'Peanuts' for BTI?
Mitch Wagner, West Coast Bureau Chief, Light Reading, 2/2/2016
Google's 5G Radio Ambitions Are Expanding
Dan Jones, Mobile Editor, 2/5/2016
How Data Center Outsourcing Fuels AT&T NetBond Growth
Carol Wilson, Editor-at-large, 2/3/2016
3.5GHz Startup Gets $22M for Small Cells
Dan Jones, Mobile Editor, 2/2/2016
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
The former CEO of Overture Networks, Mike Aquino, discusses why truly open virtualization solutions provide service providers with the greatest choice.
As anyone who knows me will tell you, I like to think I know a fair bit about this next-gen-comms malarkey, but there's nothing like an interview with one of the ...
Animals with Phones
Happy Groundhogs for Technology Day! Click Here
Live Digital Audio

Broadband speeds are ramping up across Europe as the continent, at its own pace, follows North America towards a gigabit society. But there are many steps to take on the road to gigabit broadband availability and a number of technology options that can meet the various requirements of Europe’s high-speed fixed broadband network operators. During this radio show we will look at some of the catalysts for broadband network investments and examine the menu of technology options on offer, including vectoring and G.fast for copper plant evolution and the various deployment possibilities for FTTH/B.