The CEO of international wholesaler BICS hopes the acquisition of TeleSign will help it reorient its business model away from the flagging legacy voice market and towards new digital services.

The $230 million deal for the 12-year-old US company, which nets around $100 million in revenue a year, was announced in April.

Daniel Kurgan, CEO of Proximus-owned BICS, sees the acquisition as a step towards turning his company round.

BICS registered sales of €645 million in the first six months of 2017, a fall year-on-year of 9.8 percent, while profit was down 7.4 percent to €67 million.

This followed a disappointing 2016, when revenues fell 9.6 percent to €1.5 billion and profits slipped 7.2 percent to €149 million.

“There’s not much we can do on the top line decline,” admits Kurgan when asked by European Communications about the faltering financial performance.

“We are not targeted on revenue… we know part of this top line decline is beyond our control and it cannot be the right metric.”

Like many of its peers, BICS has been unable to offset the industry-wide decline in voice traffic.

As a result, the company is focused its overall gross margin and Kurgan says he hopes for substantial progress within five years.

“It’s the challenge for every sizeable wholesale provider – how you offset the irreversible decline of some of those lines with either new services or with streams from other types of client,” says Kurgan.

TeleSign’s portfolio provides an entry point for the former.

The company offers a range of real-time communication features, such as APIs for voice and SMS messaging, that companies can add to their applications without building their own back end.

It also has a strong presence in the security market, offering two factor authentication facilities that can be added to online services.

TeleSign’s expertise in creating APIs and other software services will be used in some of BICS’s projects going forward, Kurgan says.

The first joint offerings, currently undisclosed, are expected to hit the market by the end of this year.

The wholesaler hopes to tap into the 87 percent of executives who, according to a recent TeleSign survey, think that using cloud-based communications will be vital to their companies’ future success.

Alongside its product portfolio, California-based Telesign is also set to be a crucial new sales and marketing channel for BICS, opening the door to a new pipeline of potential customers.

Specifically, it will become the primary brand for addressing web and digital companies.

According to founder Stacy Stubblefield, the demand is there from existing TeleSign customers to buy BICS solutions.

“Our clients, especially certain extremely large ones, are always looking for more ways to communicate to end-users and more types of channel they can offer to their users,” she says.

Specific examples of anticipated customers include fraud prevention companies wanting to make use of BICS’s traffic pattern expertise, Stubblefield says.

With the deal for Telesign set to complete in the next few weeks, it will be a while yet before we can access whether the partnership can help to deliver Kurgan's turnaround plan.

But with the millstone of declining voice revenues around its neck, BICS has to make it work.

More Features

Opinion: Could second brands become operators’ training ground? Opinion: Could second brands become operators’ training ground? By Jonathan Plant, Senior Marketing Manager, Openet More detail
Opinion: Cloudification is coming, but processes and culture must change Opinion: Cloudification is coming, but processes and culture must change By Santiago Madruga, VP of Communications Service Providers market, Red Hat EMEA More detail
Vodafone’s IoT head hits out at "annoying" criticisms of operator role Vodafone’s IoT head hits out at The claim that connectivity is a commodity has existed in the mobile industry for some time and has recently extended itself to the Internet of Things. More detail
Telcos bet on eSports to get down with the kids Telcos bet on eSports to get down with the kids In some circles, attempting to shrug off the image of being a bunch of crusty old network engineers by buying an eSports team would be regarded as the very definition of having a midlife crisis. More detail
Deutsche Telekom’s Head of Europe rails against “really dangerous” regulatory mindset Deutsche Telekom’s Head of Europe rails against “really dangerous” regulatory mindset Complaining about the regulatory landscape has been de rigueur in European telecoms for many a long year. More detail
    

 

European Communications is now
Mobile Europe and European Communications

  

From June 2018, European Communications magazine 
has merged with its sister title Mobile Europe, into 
Mobile Europe and European Communications.

No more new content is being published on this site - 

for the latest news and features, please go to:
www.mobileeurope.co.uk 

 

@eurocomms

Other Categories in Features