Telecoms-software vendor CSG International (CSGI) has announced the acquisition of key assets of Volubill, a supplier of integrated policy and charging products for the telecoms industry. It became clear at the end of October 2013 that Volubill was having problems and that it was going into administration and would probably be broken up.
In a statement to Informa Telecoms & Media, CSGI stressed that its main reason for buying Volubill was to acquire Volubill’s intellectual property, expertise and products, the most important of which was Volubill’s OLC (online charging) assets. Because of the vagaries of the French liquidation process, CSGI was not able to acquire all of Volubill’s assets, and although it was able to pick up the entire US and Danish operations, the contract with Orange, formerly France Telecom, was not part of the deal, and was the most significant of the few Volubill client contracts not to be acquired.
Why does it matter?
Although there might be a small element of opportunism in CSGI’s acquisition, the announcement is yet another instance of the consolidation that has been going on in the industry for a number of years. As far back as 2006, when Oracle acquired real-time-billing vendor Portal, smaller billing and charging vendors have been targets for acquisition by their larger OSS/BSS counterparts looking to extend the capabilities of their own portfolios. Some of these smaller companies pioneered the development of OLC, based on the 3GPP specification for PCRF (policy and charging rules function). But it has become apparent over the past couple of years that in order to fully exploit the revenue-generating potential of PCRF and OLC, the two elements need to be closely integrated. Before this acquisition, CSGI had already had success with its policy-based traffic-management products but only offered integrated policy and OLC via partnerships with other vendors or via a standard 3GPP interface. With the acquisition of Volubill’s real-time-charging capabilities, CSGI can now offer a complete, in-house, policy-based OLC package, putting the company in position to seriously challenge its rivals for this increasingly lucrative sector of the telecoms-software market.
What’s next?
It is likely that after a period of consolidation, CSGI will begin flexing its newly acquired muscle to win a share of the OLC sector in EMEA and beyond. It could also make a killing in its traditional market among the US cable operators as they adopt a multiplay strategy and start looking for more-sophisticated billing and charging capabilities than they have previously required. In the wider market, there aren’t many Volubills left, and those few that do remain are likely, sooner or later, to go the way of Portal, LHS, HighDeal and Volubill itself, regardless of their financial health.
What should you do?
Small BSS vendors: product BSS vendor are just about over.
Large BSS vendors: Get ready for some serious competition in the OLC sector as yet another company with a long tradition in the telecoms-software industry and an impressive list of customers joins the fray.
CSPs: This deal offers yet more choice of fully integrated policy and OLC products. Given the growing complexity of mobile broadband data services, fully integrated policy and OLC is becoming a necessity rather than an option. Although standard 3GPP interfaces are available for separate policy and OLC functions in a multivendor environment, the need to effectively put both elements in the same box is now largely a foregone conclusion in the BSS sector.
Peter Dykes is a senior analyst with responsibility for Informa Telecoms & Media’s Networks Intelligence Centre