CSG eyes biz chances in China's billing market Updated: 2004-06-17 14:44
Billing giant CSG Systems is shifting its global focus to China, in
preparation for its strategic entry into the nation's lucrative cable-billing
market.
The company's growth engine over the next few years will be fuelled by
China's booming telecommunications sector -- a vision described by CSG's senior
executives as "strategically critical" for the firm's global deployments.
CSG Systems is negotiating with several major Chinese telecoms operators as
it tries to rise to the top of the nation's billing services firms, sources
close to the company said.
Those negotiations reportedly include China Telecom, the nation's largest
fixed-line operator.
"Securing a deal with China Telecom would help CSG consolidate its foothold in the
country, and beat its rivals in the global billing market," an industry insider
said.
China Telecom provides services in 21 provinces and holds 70 per cent of the
nation's trunk-line transmission network.
CSG Systems, which serves more than 265 telecoms providers in more than 40
countries, has seen its annual revenues jump six times in the past decade, said
Neal Hansen, the company's chief executive officer.
"China will help us grow even faster in the future. That is why we have
deployed a major part of our US$135-million global investment in the country,"
he said.
China's telecoms industry will grow an annual 10-14 per cent in each of the
next four years, as its new 3G (third-generation) services are ready to be
launched and mobile subscribers are increasing by more than 40 million each
year, said Liu Fuchun, an industry analyst.
China's telecoms billing market is segmented, Xu Ming, CSG Systems' business
development manager, said.
Provincial operators under the brand name can adopt solutions from different
billing service providers, Xu added.
China's policy-makers, aware of the benefits of systems' mutual
compatibility, are encouraging telecoms operators to integrate their billing
systems so they can provide subscribers with bundled services, experts said.
This has created an unprecedented opportunity for experienced international
billing players to win a share of the Chinese billing market, which has been
dominated by domestic service providers, they said.
CSG's billing technology can support more than 10 million telecoms
subscribers simultaneously, and can empower clients to deliver unparalleled
customer services, including fixed-line, broadband and wireless telephony, Xu
said.
South China's Guangdong Province has around 30 million fixed-line users,
while most other provinces have more than 1 million subscribers.
"It is still unclear if telecoms operators will adopt one company's billing
solutions for all their provincial subsidiaries. We hope we will find out soon,"
he said.
China and India, the region's two largest telecoms markets have been showing
their strength, in terms of new product innovation, Hansen said.
"We will keep our commitment to these new emerging markets. We set up local
R&D (research and development) centres, such as the one in Beijing, and
believe localized technologies will serve our global client base rather than be
used merely in local environments," he said.
CSG Systems last year teamed with IBM to sign up Beijing Telecoms as its
first Chinese client. The billing firm provides solutions for the local
operator's fixed-line, advanced IP, high-speed Internet and leased-line
services.
CSG Systems' solid financial background has enabled the company to invest
10-12 per cent of its annual gross revenues in research, he said.
The company's stellar growth in billing and customer care solutions for
wire-line, mobile, advanced IP services and broadband has made the firm an
acquisition target.
Several weeks ago, US-Israeli services supplier Amdocs completed a due
diligence study on CSG Systems. Merger talks are ongoing.
CSG Systems is a NASDAQ-listed company that recently completed an issuance of
US$230 million worth of convertible debts to strengthen its financial footing.
CSG was established in 1994 as a cable service company. In 1996, CSG acquired
CSG International Ltd, a UK-based customer management and billing services
provider. |