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10 October 2012
BSS provider CSG International has reinforced its position in the wholesale solution segment with the $19 million purchase of Ascade. Robert Anderson reports on how CSG’s solutions are helping operators to defend and improve their inter-carrier revenues.
In the space of the last decade,
billing and managed services provider CSG International has
made a series of strategic acquisitions that has helped align
its portfolio ever closer to the demands of the wholesale
This year, the company continued to distance itself from the
competition with the $19 million purchase of Ascade, a Swedish
company specialising in advanced, intelligent inter-carrier
trading and routing.
"By adding the Ascade product set to our portfolio, we have
further enhanced and strengthened our leadership in the
wholesale space, giving us an additional set of powerful
capabilities that we look forward to offering to our large
customer base," explains Hassan Iftikhar, vice president of
product management, wholesale business management for CSG.
"This acquisition puts us squarely at the front of the
wholesale solutions market."
CSG was started in 1982 as a
billing solution provider for the cable industry, serving the
likes of Comcast and Time Warner Cable. As time went on, the
company enhanced its capability through the strategic
acquisitions of Telution, Quaero and Prairie Voice
In late 2010, CSG acquired UK-based BSS vendor Intec Telecom
for $372 million. Intec was a provider of interconnect
settlement, mediation and retail billing systems. This
acquisition was said to have significantly enhanced the
company’s BSS portfolio and gave its business
global reach at over 400 carriers.
Several months after the acquisition, CSG was renamed CSG
International to reflect its new scale. Today, the company
serves some of the world’s largest carriers,
including AT&T, Comcast, DISH Network, France
Telecom-Orange and Vodafone.
The company feels that the size and diversity of this customer
base gives it a unique view of the challenges and drivers
within the wholesale market.
Under pressure from the ongoing financial crisis and reducing
termination rates, and facing competition from OTT players such
as Skype, many of CSG’s clients are struggling to
find ways to reduce costs and increase operating margins.
"From our perspective the growth of OTT players and regulatory
pressures on termination rates meant that carriers had to look
at two things," says Iftikhar. "One is how do they grow those
international revenues, and secondly, and mostly importantly
for us, carriers have to look at what they can do on the
systems side to streamline their internal business processes
and make them smarter."
By July 2012, CSG had completed its acquisition of Ascade,
which was established in Stockholm 15 years ago as a wholesale
consulting business. The company launched its first solution in
2002, focussed on optimising voice traffic flow between
operators in Europe. It then established itself in the global
marketplace by developing solutions for quality monitoring and
quality-based routing –
allowing carriers to base routing decisions on more than purely
CSG says that it was Ascade’s domain expertise in
optimised routing and wholesale billing that caught its eye.
Ascade had grown a customer base of over 70 carriers located in
Europe, the Middle East and Asia. The two companies combined
provided an opportunity for CSG to cross-sell its BSS and
managed service solutions to Ascade’s customers,
and to take Ascade’s advanced routing and quality
assurance products to its own 250+ customer base.
"Obviously when you buy a company it’s not just
about products, it’s about people, financials and
so forth. Ascade had a very healthy revenue stream, they were
generating cash and had a good strong installed base of
customers that were complementary to our own," explains
With the Ascade acquisition under
its belt, CSG is now looking to extend its range of wholesale
solutions to new customers and expects to also find a lot of
interest among its existing customer base.
CSG has estimated that its wholesale automated routing
solutions can lead to average cost savings of between 3 and 4%,
which it says is a highly compelling proposition, particularly
as this figure can be significantly higher depending on the
level of automation currently employed.
Quality of service (QoS) is also taking on a greater level of
importance with carriers, according to Johan Harryson, director
of wholesale EMEA at CSG, formerly the general manager of EMEA
& Americas at Ascade. "We know that cost is an important
factor but these operators are also trading with each other,
meaning that if they can terminate traffic with demonstrably
good QoS, there is the potential for them to grow their revenue
by very high percentages," Harryson explains.
AscadeAssure lets carriers assess the QoS and the potential for
fraud and other revenue loss associated with a wide variety of
potential routes. The software, and Ascade’s
ability to interact with virtually every common switch type on
the market, means that preferred physical routes for different
call types can vary minute by minute according to decisions
made by its optimal routing engine.
An example of this is Ascade’s calling line
identification (CLI) service, which checks whether subscribers
receiving international calls are able to identify who is
calling. This can prove important, claims the company, as a
subscriber that cannot tell who is calling them is less likely
to answer (particularly when abroad), resulting in a loss of
revenue for both carriers involved. Another example is
Ascade’s ability to detect 'bypass
fraud’ through its SIM Box detection services,
ensuring that calls are terminated over high quality, licensed
– and chargeable - routes.
CSG says AscadeAssure is the leading test call platform on the
market, used by MNOs, carriers, SMS aggregators and other
service providers to proactively secure end-to-end QoS as well
as to detect fraud in their international networks. It says the
platform allows customers to increase traffic volumes, revenues
and margins as it helps to ensure a higher number of successful
calls/SMS are passed through the customer’s
CSG believes its global footprint will be vital in bringing
Ascade’s solutions to new markets. Ascade had a
limited presence in North America, but this is expected to
change owing to CSG’s strength in the market.
Equally, CSG hopes to leverage its strong position in Latin
America, where Ascade has no previous presence. CSG has
extensive customer references in the region, including
Telefónica, Vivo and Nextel, and its strong sales and
delivery team will provide a springboard for the Ascade
Moving forward, CSG is focussed on
helping carriers maximise top line revenue and monetise their
offering. "We’re constantly trying to look at
demand from both the consumer market and the carrier segment,
and then develop product sets that can help carriers address
that demand," says Iftikhar.
Another of CSG’s objectives is to help carriers
position themselves more strongly in emerging service value
chains, providing services to both buyers and sellers in new
service ecosystems. "CSG’s goal is really to
provide the systems and the services to make that transition,"
The company’s faith in the revenue management
space appears well founded. It is estimated that the global
revenue management market will grow from $6.5 billion in 2011
to $7.5 billion in 2016 with business optimisation likely to be
a key driver, according to Analysys Mason.
As carriers increasingly look to automated, intelligent systems
to achieve cost and operational efficiencies as well as improve
the quality of experience delivered to customers, CSG says it
is focussed on offering solutions across the entire wholesale
History: Originally known as CSG Systems, the
company began life as a billing provider in the US for cable
companies. Through a series of acquisitions over the years CSG
has enhanced its portfolio, including Telution in 2006, Prairie
Voice Services and Quaero in 2009. With the acquisition of
Intec in 2010, the company rebranded to become CSG
International. Ascade is the company’s latest
acquisition, which completed in July 2012.
CEO and president: Peter Kalan is CEO and
president of CSG International. He first joined the company in
January 1997 and held several management roles before his
appointment including CFO, EVP and EVP of business and
Revenue: CSG had total revenues of $734.7
million for FY2011.
Customers: CSG’s client list
includes more than 500 customers worldwide in the cable,
wireline, wireless, utilities, financial services,
media/entertainment, logistics/transportation and government
Global locations: CSG has offices across North
America, Asia-Pacific, Central America/Latin America and
Products and services: CSG’s
products include revenue management, content management and
monetisation, customer interaction management, and analytics
and intelligence. CSG’s services include business
services consulting, business solutions implementation, core
product support, business solutions optimisation, technology
operations, and product management and development.