DOX and Vonage Join Forces - Analyst Blog

Amdocs Ltd. (DOX) has entered into a managed services agreement with Vonage Holdings Corporation (VG), one of the leading companies providing high-quality voice and messaging services over broadband networks with a subscriber base of 2.4 million.
 
Under the five-year agreement, Amdocs will provide business support systems (BSS) to Vonage’s U.S., Canadian and United Kingdom operations. BSS solution enables better sales through quicker product launch, effective promotions, and customer service as well as improvement of operational efficiencies and reduction of costs. We believe these long-term service agreements have over the years strengthened the company’s customer base and product offering in the industry.
 
Amdocs stands well-positioned to leverage a long-term trend toward information technology (IT) outsourcing. The company targets leading companies in the communications business by offering a total systems solution, consisting of its integrated customer management products along with its specialized services. This has made Amdocs steadily gain market share from its competitors.
 
As of the end of the second quarter of 2010, Amdocs had a 12-month backlog of $2,460.0 million, up from the first quarter backlog of $2,425.0 million.  Taking into consideration the business trends and solid backlog, the company anticipates achieving at least 1% to 2% sequential quarterly revenue growth (in constant currency) throughout fiscal year 2010.
 
Amdocs is the dominant provider of customer relationship management (CRM) and billing systems to the communications service providers. However, the company has little exposure as a supplier of billing systems for the cable industry. DOX competes with several independent suppliers of information systems and services, including Convergys Corporation (CVG), and CSG Systems International Inc. (CSGS). We currently maintain a Neutral recommendation of Amdocs.
 

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