On Friday, we commented on a Light Reading report that PCRF vendor, Volubill, was about to be acquired. After considerable investigation and forthcoming information from interested third parties over the weekend, we can now provide more substantial information on the possible fate of Volubill.
We do not wish to sensationalize the fate of any player in our tight-knit community but it is our duty to get things straight if we may have reported incorrectly.
We now know that Volubill is actually in the hands of a French receiver appointed on October 29 in a process known as ‘liquidation judiciaire’ (judicial or compulsory liquidation in English). The company appears to have been traveling OK up until 2010 as previously reported but turnover reduced to €11.35m and €10.75m in 2011 and 2012 respectively. Net income for those two years was -€3.73m and -€2.96m and current liabilities exceed €12.5m so it is not difficult to see where the problems lie. The company is simply no longer liquid, not helped by receivables of €10.5m that has barely reduced over two years.
Volubill is not the first, and probably won’t be the last, to suffer from the poor paying habits of many CSPs around the globe. I can recall earlier this year attending a user group conference where the vendor CEO openly addressed the predominantly CSP crowd berating them for their poor paying habits that slowed his company’s ability to grow and to provide the service and innovation they demanded. Another form of bill shock?
This may have been a contributory factor in Volubill reaching this state, but it is probably not the only one. It’s history and cost base in Europe may have also added to its load. Even though it had operations in Malaysia, overhead costs in Europe, especially taxes and social service commitments for staff are positively stifling when compared to those in Asia, where many of the new software products are emanating from. Of Volubill’s €12.5m in liabilities €6.4m are trade debtors and €1.1m in taxes and social services.
Volubill’s core charging product emerged from Belle Systems, a small Danish company of around 25 people that had developed a means to bill IMS services. Around 2001 it attracted the attention of Cisco that made its first software investment outside of the USA in the fledgling company that then became Digiquant (bells are ringing for some readers now, I’m sure).
Digiquant made sales to some leading players including Telefonica, Tiscali, Telecom Italia, Belgacom, Telekom Malaysia, iBasis, and Omnitel Vodafone but mainly around charging for IMS. Even back in 2002 it reported a loss of €12.4m ($13.8m) on revenue of €16.6m ($18.5m). In September 2003 it was acquired by Intec Telecom Systems for $10.6m.
In November 2007 Intec agreed to sell certain assets, including software intellectual property rights and customer contracts, to France based Volubill SA for an initial sum of ₤1m. The assets transferred related to Intec’s Denmark-based ‘Intec DCP’ rating and charging product, originally from the Digiquant acquisition.
Intec had integrated capabilities of DCP into its portfolio and would continue to offer them to its global customer base under the agreement. Intec would also continue to receive a proportion of support and maintenance revenues from the Intec DCP customer contracts transferred, as well as a proportion of licence fees for new sales contracted by Volubill, for a period of two years.
Intec and VoluBill also agreed to enter into a partnership agreement that would allow Intec to resell the DCP product as part of its BSS/OSS portfolio. It was reported at the time that Intec did not expect the disposal, the sale proceeds or subsequent revenues to have a material impact on its business in future periods. In November 2010, Intec itself was acquired by CSG Systems for $370m.
Prior to becoming Volubill’s CEO, John Aalbers was responsible for the P&L and direction of Intec Telecom Systems’ fastest growing product lines, including Singl.eView and the Dynamic Charging Platform and was seen as bringing the extensive experience necessary in building a high growth solutions business.
So, who is likely to be interested in what’s left of Volubill after its liquidation, if it gets that far? Presuming a ‘white knight’ does not ride in with a bag full of cash to ward of the creditors it seems likely what is there will be broken up and sold to the highest bidders.
According to unverified information we have received, a small, almost virtual organisation known as Broadband Systems is in the mix. It is headed up by one Michael Andersen, who has a long history with the Volubill product going back to its Digiquant days. He set up Broadband Systems essentially to provide some requests for functionality from customers that Volubill chose not to include in its roadmap. With such in-depth knowledge of the product, a low cost base and existing relationships with customers, Broadband Systems is a likely candidate.
However, such a small operation may not be able to manage support for all of Volubill’s customers and what of those customers Intec was supporting before its acquisition by CSG? If any of those customers are still using some of the Digiquant/Volubill/Intec code it may be in CSG’s interest to take a hand in proceedings, at least to protect those customers.
Looking further, there are still some other big players that do not have a viable PCRF product in their portfolio and with an impressive list of customers attached they may see this as an opportune time to swoop. We have seen stranger things in our sector. The business may be worthless but its assets, well, that may be a different matter.
Aalbers and his team have been understandably withdrawn of late so we cannot confirm or deny any of our outcome theories, but it will be a shame to see such a great team of people and characters broken up. We will be watching and listening for further developments.