BSS (inc. billing, revenue assurance)

Clearwire's SPIT Stress

9:15 AM -- As Clearwire LLC (Nasdaq: CLWR) extends its customer base -- it had about 1 million retail and 1 million wholesale WiMax customers using its network at the end of June -- it's going to need Service Provider Information Technology (SPIT) systems that can scale and perform, especially when it comes to billing and customer relationship management (CRM). (See Clearwire Posts Q2.)

That's why Clearwire is deploying a "customized customer care and billing platform" supplied by Amdocs Ltd. (NYSE: DOX), with which it struck a seven-year deal in April 2009. (See Clearwire Picks Amdocs.)

Until that system is developed and deployed and "we are able to transition our business to the new systems," Clearwire is "continuing to rely on our existing customer care and billing systems."

But things aren't going as well as hoped. According to its recent 10-Q filing with the SEC, Clearwire has:
    ...encountered unanticipated delays resulting primarily from the discovery of defects in the new Amdocs software code. Due to these delays, the implementation of the new systems has been delayed and will continue into 2011, and the delays have resulted in additional, unplanned costs to the Company.

    We cannot provide assurances that we will be able to resolve the issues causing such delays in a timely manner or that we will not experience further difficulties, delays or interruptions with the development and implementation of these new systems. Additional delays would likely result in additional costs to the Company. Additionally, although the Amdocs Agreement limits certain of our payment obligations, we may incur significant cost overruns in transitioning to the new systems.

The costs are already mounting up: In the first six months of 2010, the operator spent $47.7 million on the Amdocs system's development, according to the SEC filing.

And Clearwire's patience is running thin:
    If we are unable to complete the development and implementation of the new customer care and billing systems being developed by Amdocs, and to transition from our existing systems to such new systems, in a timely manner, or at all, we may be forced to continue to rely on and upgrade our existing systems or to procure new systems from other vendors.

And there would be no shortage of companies ready to step in and take on the job…

— Ray Le Maistre, International Managing Editor, Light Reading

Jeff Baumgartner 12/5/2012 | 4:27:06 PM
re: Clearwire's SPIT Stress

Wow, that would seem to represent a bigger threat to its business than whether or not CLWR ends up giving LTE the vote. JB

Sign In