cVidya Networks, a provider of revenue assurance solutions for communications operators, has signed a contract with Bezeq (TASE: BZEQ). The contract is worth an estimated several million shekels. The project is scheduled for completion by the end of September.
Bezeq will install cVidya's solution for its ADSL applications and traditional communications services, such as frame relay lines, leased lines, and traditional voice switches.
The contract is very important strategically for cVidya, in addition to the revenue it will generate. First, the fact that Bezeq is Israel's traditional fixed-line communications operator means that the contract is an important achievement on cVidya's home court. Communications operators worldwide attribute great importance to the ability of technology companies to sell systems to local operators.
Second, traditional communications operators such as Bezeq usually examine new technologies with great care. cVidya's success with Bezeq is a kind of certification of the system's quality that may the open doors of many other communications operators around the world to the company.
Increasing revenue from existing and new communications services is a primary goal of communications operators worldwide. Bezeq VP economics and businesses development Ari Bronshtein said yesterday, "We've been monitoring cVidya's development since its beginning, and we're pleased to officially join the list of communications operators in world who have chosen it to provide revenue assurance services."
cVidya has developed a revenue assurance system for data communications networks, thereby giving communications operators a major advantage over companies that have developed revenue assurance systems for voice networks, and are now trying to convert these systems to data networks.
Figures published by KPMG indicate that the transition by wireless operators from voice networks to data networks is expected to cause leakage of up to 30% of revenue. The leakage among wire-line operators is expected to amount to 9-15% of revenue, but this is a fixed payment. The moment the wire=line communications industry switches to rates based on volume usage, content, and content quality, the problem is expected to get much worse. Another painful problem is fraud on networks, which is expected to rise with the transition to data networks, and worsen the problem of revenue leakage.
Communications operators know that the amount of leakage could become the difference between profit and loss, and the demand for effective revenue assurance systems is growing. Last year, a new job began appearing at a growing number of communications operators: revenue assurance manager.
Published by Globes [online], Israel business news - www.globes.co.il - on January 13, 2005