Like their counterparts in the wireless service and infrastructure arenas, telecom equipment vendors
are consolidating and reorganizing at an increasing pace.
Most segments seem to be affected, from tower companies
to semiconductor manufacturers. One segment that has been particularly active during the last several months is
billing.
Amdocs Ltd., a global customer care, billing and order management solutions company, last week expanded
its capabilities with the purchase of Architel Systems Corp., a Toronto, Ontario, provider of service provisioning and
activation systems. Amdocs said the acquisition will allow it to provide end-to-end solutions for its telecom customers
and broaden its offerings across the operations support systems market to encompass customer care and billing, order
management, service provisioning and service activation.
The transaction is valued at about $400 million.
The
Amdocs transaction follows close on the heels of another transaction involving a well-known billing company. Lucent
Technologies Inc. in January announced plans to acquire Kenan Systems Corp. for about $1.48 billion.
“The
Lucent/Kenan announcement is interesting because it is a switch vendor getting into the billing and customer-care
space,” said Perry Walter, wireless analyst at Robinson-Humphrey Co. in Atlanta. “Amdocs bought a
company outside the billing space.”
Walter noted several billing and customer-care companies have formed
partnerships or joint ventures to expand their capabilities, such as the agreement announced last month between Saville
Systems and MetaSolv Software Inc.
Asked whether billing and customer-care companies would have difficulty
surviving as stand-alone companies, Walter said, “This means it is going to be difficult to be a stand-alone billing
and customer-care provider that doesn’t have relationships with other companies. But it doesn’t necessarily mean you
have to merge with someone.”
In other telecom equipment vendor news:
Watkins-Johnson early
last week announced it was putting itself up for sale, and by the end of the week it had a buyer for its Semiconductor
Equipment Group. Silicon Valley Group, a manufacturer of automated wafer processing equipment, signed a non-
binding letter of intent to purchase Watkins-Johnson’s SEG for a price to be based on the net value of the purchased
assets and liabilities at the closing date of the transaction.
The transaction includes Watkins-Johnson’s atmospheric
pressure chemical vapor deposition products and facilities in California and Japan.
The company is coming off of a
year in which it saw its wireless communications sales increase 10 percent while semiconductor equipment sales fell
nearly 50 percent. A weakened semiconductor market last fall prompted Watkins-Johnson to restructure the company,
including a 20-percent work force reduction.
The General Electric Co. plc signed an agreement to acquire Reltec
Corp., an access systems and network components and services provider for $2.1 billion, including assumed debt of
$361 million.
Reltec will be combined with GEC’s Marconi Communications subsidiary, which specializes in
broadband transmission and network integration.
GEC said the acquisition will enhance its position in the
transmission and access segments of the worldwide communications equipment market and give it an established North
American market base, technical expertise and enhanced North American distribution.
Hewlett-Packard Co. said it
is reorganizing itself into two independent companies-one focused on the measurement business and the other focused
on the computing and imaging business.
The company said it is considering an initial public offering for about 15
percent of the measurement company’s outstanding shares by the end of the year. The company’s test and measurement
division is involved in wireless network testing.
HP’s board of directors approved the realignment plan at a special
meeting.
Comverse Technology Inc. acquired Amarex Technology Inc., a privately held New York City company
that develops software-based intelligent peripherals and service nodes for telecommunications networks as well as
software for call-center-based customer service applications.
Comverse provides platforms for multimedia
messaging and other enhanced services to network operators, including 275 wireless and wireline customers.
Alcatel signed a definitive agreement to acquire Xylan Corp., an internetworking company, in a transaction valued at
about $2 billion. The acquisition includes a cash tender offer for all the outstanding shares of Xylan, which will
commence by March 8 and is scheduled to expire within 20 business days afterward. Completion of the acquisition is
subject to 90 percent of the shares being tendered, among other conditions. The deal is expected to be completed in
early April.
Alcatel said it is implementing a strategy of becoming a key worldwide player in the Internet field,
including acquisitions of Internet protocol-focused companies. Xylan will serve as the center of competence for all of
Alcatel’s enterprise data networking solutions in addition to providing key additions to Alcatel’s IP and ATM solutions
for service providers.
