Amdocs declines to announce Russia sanctions

The provider of B/OSS software lists three major Russian clients in its last annual filing with US authorities and also does business in Ukraine.

Iain Morris, International Editor

March 8, 2022

5 Min Read
Amdocs declines to announce Russia sanctions

It is hard to be excited by Amdocs – hard, that is, if you are one of the ordinary people who finds telecom software about as much of a thrill as weeding. The Israeli-US firm specializes in developing business and operational support systems (sometimes shortened to BSS, OSS or B/OSS). Even the B/OSS analysts need intravenous caffeine therapy and matchstick scaffolding for their eyelids during presentations.

But there can be no doubt that Amdocs is vital for the telecom sector. B/OSS are needed for all sorts of important activities, from product and customer management through to charging and billing. Shutting them down could trigger chaos. And Amdocs' client list names dozens of operators in all parts of the world. In its last fiscal year, it made $4.3 billion in sales and nearly $700 million in net profit.

Figure 1: Business and operational support systems are critical in today's networks. (Source: Amdocs) Business and operational support systems are critical in today's networks.
(Source: Amdocs)

Right now, four names leap out of that client list, published in Amdocs' last annual filing with the US Securities and Exchange Commission (SEC). MTS, Rostelecom and VEON all have major Russian networks that have been cut off from Western suppliers following the invasion of Ukraine. Rostelecom was even singled out by the White House as one of 13 Russian companies that will no longer be able to raise money through the US market. The other Amdocs client is Kyivstar. As the name indicates, it is active in Ukraine.

The scope of Amdocs' work for Kyivstar, MTS and Rostelecom is unclear, but it ousted Ericsson as a BSS supplier to VEON's Russian business in early 2019. While the value of that contract was never made public, it was described by the vendor as a "full stack" offering at the time. Essentially, that means Amdocs was selling a whole suite of products.

Mounting pressure

Regardless of sanctions, Western firms are under mounting pressure to suspend activities in Russia while Vladimir Putin, its leader, continues to wage war in Ukraine. Well-known brands including Burberry, Ikea and Netflix have already slammed on the Russian brakes. Others, including Coca-Cola and McDonald's, have been met with a backlash for carrying on as normal.

It will go unnoticed by the average Big Mac customer, but Amdocs appears to be more in the McDonald's camp. Asked if it would sanction Russia, the firm responded with a wordy statement that suggests it will not unless forthcoming legislation makes that necessary. Here is the Amdocs statement in full:

"Amdocs is a global company listed on NASDAQ, supporting the world's leading telecommunication and media companies. Amdocs adheres to international and local laws and regulations in all territories where we operate and serve our customers. On an ongoing basis, we monitor different circumstances affecting our business (global and local) and apply adjustments and mitigations when needed. As the current situation in Ukraine progresses, we continue to ensure that our operations, in the region and globally, are conducted in adherence with applicable business restrictions, including ever-evolving relevant trade controls and sanctions."

It is undoubtedly a tricky situation for Amdocs. Hardware vendors at least have the clarity of US sanctions to refer to when explaining to customers why deliveries have been halted. Software is perhaps more complicated. Flicking some "kill switch" on systems already sold to Russian operators would be seen as a hostile act. But denying future maintenance, upgrades and bug fixes to those customers would not be so different. Amdocs might also be worried about breaching customer contracts in the absence of firm legislation.

SAP makes a clean(ish) break

Still, Germany's SAP, another software supplier to large organizations, has gone much further than Amdocs. In a statement published on March 2, CEO Christian Klein said: "We are stopping business in Russia aligned with sanctions and, in addition, pausing all sales of SAP services and products in Russia."

Presumably after feedback from some volatile Russians and their lawyers, Klein's statement was modified two days later to include the following: "We will continue to serve our existing customers within the scope of our contractual commitments and as far as sanctions and export control restrictions permit, but we will not accept new orders or solicit new business."

Want to know more about 5G? Check out our dedicated 5G content channel here on Light Reading.

Another issue for Amdocs is the fact that VEON owns Kyivstar. Does it halt business in Russia but continue to supply Ukraine, knowing both are part of the same group? As politics intrudes on commerce, does its relationship with a Russian network have implications for its business in Ukraine? Dmytro Kuleba, Ukraine's foreign minister, has reportedly demanded that "all Western companies must withdraw from Russia." For those also active in Ukraine, there is more at stake.

The denial of B/OSS to Russian operators adds to their dilemma. Ericsson and Nokia have already suspended delivery of network products to Russia. Device makers including Apple and Samsung have also stopped shipments. If this goes on much longer, Russian operators and their customers will find themselves in a much darker and more silent place.

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— Iain Morris, International Editor, Light Reading

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About the Author(s)

Iain Morris

International Editor, Light Reading

Iain Morris joined Light Reading as News Editor at the start of 2015 -- and we mean, right at the start. His friends and family were still singing Auld Lang Syne as Iain started sourcing New Year's Eve UK mobile network congestion statistics. Prior to boosting Light Reading's UK-based editorial team numbers (he is based in London, south of the river), Iain was a successful freelance writer and editor who had been covering the telecoms sector for the past 15 years. His work has appeared in publications including The Economist (classy!) and The Observer, besides a variety of trade and business journals. He was previously the lead telecoms analyst for the Economist Intelligence Unit, and before that worked as a features editor at Telecommunications magazine. Iain started out in telecoms as an editor at consulting and market-research company Analysys (now Analysys Mason).

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