Billing giant Amdocs (NYSE:DOX) is likely to supply billing systems to Internet protocol television (IPTV), a joint venture of Microsoft (Nasdaq:MSFT) and SBC Communications (NYSE:SBC; SBT; LSE; XETRA:SBC). There are no precise estimates about the financial scale of IPTV's billing project, but it cannot be ruled out that the initial stages will be worth several million dollars.
In any event, this is a very important strategic achievement for Amdocs. If and when Amdocs is chosen to provide IPTV with billing systems, it will Amdocs' first foothold in the IP television market. Amdocs' management has already said more than once that it was interested in entering this sector, but has not yet had any contracts.
In November, Microsoft and SBC announced that SBC had chosen Microsoft's platform for SBC's Lightspeed project. The deal is worth an estimated $400 million spread over ten years. This was the first deal on this scale by a US communications provider.
It is unclear at this stage whether Amdocs' IP billing technology is ready, but it is clear that Amdocs is SBC's vendor for billing solutions, and it is therefore quite reasonable for SBC to select Amdocs' systems for IPTV. Furthermore, SBC is very dependent on Amdocs' customer relationship management (CRM) systems at both the front end (network) and back end (IT systems).
The advantage of Amdocs' billing systems is their proven capabilities in all matters relating to pricing especially large volumes of communications at a lower-than-average rate of malfunctions for the billing industry.
Since June 2004, SBC has been testing IPTV applications using Microsoft's platform. A field test is scheduled for mid-2005, and commercial launch is scheduled for late 2005. SBC hopes to provide the service to 90% of its high-end market segment, amounting to 80 million households, by 2007.
The platform is due to provide secure and efficient features for IP home television networks, including video-on-demand (VOD), digital video recordings, and an interactive electronic broadcast guide. In addition to a home television network, it will be possible to transmit broadcasts to computers, handheld computers, and telephones.
Amdocs declined to comment on the report.
Published by Globes [online], Israel business news - www.globes.co.il - on December 22, 2004