The move is the latest in Comverse Technology's efforts to exit its current inefficient holding structure now that its accounting woes are behind it. It's in the process of spinning off its core Service Provider Information Technology (SPIT) business, Comverse Inc. (Nasdaq: CNSI), which now has a new CEO and CFO in place, and is also looking for a buyer for its enterprise security and analytics business, Verint Systems Inc. In 2010 Comverse Technology sold its Ulticom subsidiary. (See Comverse Gets a New CEO, Comverse Appoints CFO and Ulticom Agrees $90M Sale.)
The Comverse telecom software unit, which specializes in business support systems (BSS) and value added services (VAS), failed to attract a buyer last year, so now a break-up of the parent is regarded as the best way forward. (See Comverse in Play.)
Why this matters
The planned emergence of the Comverse SPIT unit as a standalone entity comes as the billing, charging and customer experience management (CEM) sector undergoes significant changes.
The acquisition of Convergys Information Management by Netcracker Technology Corp. has created a much more competitive environment in the telecom back office systems market, putting Comverse and Amdocs Ltd. (NYSE: DOX) under greater pressure. (See NEC to Buy Convergys Unit for $449M, NetCracker's Suite Spot and Analysts Mull NetCracker's New Buy.)
And as a recent survey by Infonetics Research Inc. showed, Comverse is currently eclipsed in the convergent charging market (in terms of market perception) by Ericsson AB (Nasdaq: ERIC) and Huawei Technologies Co. Ltd.
The sooner Comverse's ownership revamp is settled and the company can focus completely on its business, the better it will be able to tackle the major competitive challenges it faces.
- Comverse Hits a Slippery Slope
- Tough Going for Comverse
- Comverse Goes It Alone
- Comverse Kobi Coughs Up $54M
— Ray Le Maistre, International Managing Editor, Light Reading