Comverse Plans to Acquire Netonomy

Comverse, a subsidiary of Comverse Technology that provides software and systems enabling multimedia network enhanced services, disclosed Wednesday that it signed a definitive agreement to acquire privately held self service specialist Netonomy for about $19 million in cash. The deal is intended to expand Comverse's Total Communication product portfolio, which provides real-time billing and customer management functionality for communication service providers. The acquisition is subject to the customary closing conditions. The announcement comes on the heels of Comverse Technology having severed ties with Jacob "Kobi" Alexander, former chairman and CEO; David Kreinberg, former executive vice president and CFO; and William Sorin, a former director and general counsel. The three have been charged with conspiracy to commit securities fraud, mail fraud, and wire fraud for alleged stock options manipulation; Alexander failed to show up for a court appearance earlier this month, and subsequently has been declared a fugitive by the FBI, according to published reports. Netonomy focuses on delivering customer self service, bill analysis, and point of sale solutions; its MyNetonomy suite of self service applications helps consumers, enterprises, and retailers activate and manage subscriptions, buy new products and services, and review, analyze and pay bills using virtually any communication device, according to the company. Netonomy's customer base includes several communications service providers like Bouygues Telecom, several Orange operators, T-Mobile UK, Telstra, and Vodafone UK. "All of our customers now will be able to take advantage of [the Netonomy] suite of products including things like point of sale, enterprise self care, and bill analysis tools that are targeted specifically for the enterprise market," says Alice Bartram, executive director of marketing for the billing group at Comverse. It "really gives our customers access to a broader set of solutions preintegrated into our billing portfolio." Comverse's plan is offer Netonomy's functionality both as a standalone offering and integrated with Comverse's solutions, according to Bartram. "Joining Comverse was a natural move," John Ball, CEO of Netonomy, said in a written statement. "Service providers need to accelerate the adoption of direct self service quicker than ever to lower their cost of acquisition and service, regardless of market segment. Web access to select and change plans and features also improves customer satisfaction and loyalty, while reducing operational costs." The acquisition is in line with Comverse's strategy to develop a complete solution for customer and call management, according to Rebecca Wettemann, vice president of research at Nucleus Research. "Comverse has recognized that having end to end management of customers from billing to self service to customer management is the best way to streamline the whole customer service process for its customers," she says. "So adding this piece is another key step in providing the customers of Comverse's clients with another way to reach them and another way to interact." This isn't Comverse's first acquisition in this space. The company announced in December 2005 that it completed its acquisition of the GSS division and certain related assets of CSG Systems International for about $249 million in cash. The GSS division, formerly Kenan Systems, armed Comverse with GSS's suite of software-based billing solutions. "Following integration of Kenan Billing solutions, this latest addition of Netonomy better positions Comverse to provide converged billing solutions enabling superior choice, convenience and control," Zeev Bregman, CEO of Comverse, said in a written statement. "Our customers benefit from field proven and scalable technology, short time to market, and an extensive, modular designed product feature set." Telcos, according to Wettemann, should keep a close eye on the deal: "Telcos should be watching this space because as competition continues and people start toward one bill for voice and data services, the ability to provide integrated customer service across a number of different channels is going to be very important." Related articles: The Knowledge War Actions speak louder than words when it comes to the true difference between informational and transactional self-service. E-commerce Best Practices Make Perfect The 80 Percent Web Self-Service Solution