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BSS (inc. billing, revenue assurance)

Comcast Deal Shrinks CSG's Outlook

Shares in CSG Systems International Inc. went on a rollercoaster ride Wednesday after the billing and customer care vendor lowered 2013 financial guidance following the signing of a new four-year Master Subscriber Management System Agreement with Comcast Corp. that could cut revenues coming from the MSO by about 10 percent.

CSG and Comcast's previous long-term deal expired at the end of 2012 and the companies had been working together on a month-to-month basis as they hammered out a new long-term contract, the vendor said in an 8-K filing with theSecurities and Exchange Commission (SEC).

The new deal, signed Tuesday, runs through Feb. 28, 2017, though Comcast has the option to extend it for two consecutive one-year terms.

As a result of the revised, price-adjusted deal, CSG cut expected 2013 earnings to US$2.05 to $2.15 per share, on revenues of $740 million to $760 million. CSG previously anticipated $2.23 to $2.33 per share, on revenues of $755 million to $755 million.

Word of the new Comcast deal and forecast adjustment caused CSG shares to drop 6 percent during early trading Wednesday. They recovered to close up 49 cents (2.42 percent) to $20.75 each.

CSG said Comcast, its largest customer, accounted for about 20 percent of the $756.9 million in revenues pulled in for all of 2012. Forty percent of its total revenues come from its three largest clients: Comcast, Dish Network Corp. and Time Warner Cable Inc.

AT&T Inc., T-Mobile USA and Verizon Communications Inc. are among CSG's other big-name service provider customers.

— Jeff Baumgartner, Site Editor, Light Reading Cable

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