A large project of Amdocs Ltd. (NYSE: DOX) in Australia is about to shrink. "Globes" has learned that telecommunications company Telstra, an Amdocs customer since 2006, has informed Amdocs of its intention of ceasing to receive some of the support services that the company currently provides.
The contract between the two sides, covering systems that Amdocs has installed at the Australian company and support services, was estimated in the past in the tens of millions of dollars over several years. The impact of the latest move on Amdocs will therefore amount to a few million dollars. It may be that this is part of a broader change in Telstra's relationships with its business partners, but it could also be that the background to the change is dissatisfaction on the customer's part. Amdocs will apparently refrain from laying off employees following the move, and will try to place employees in other projects. No response was received from Amdocs by web-posting.
Amdocs provides billing and customer relations management solutions to telecommunications companies. Telstra is the largest telecommunications company in Australia, providing fixed-line, mobile, and Internet services. Its contract with Amdocs is in the area of OSS (operations support systems). Amdocs provides solutions to Telstra that are intended to help it to launch new, advanced services to its customers fast.
This is a large project for Amdocs, but Telstra is not among the company's very biggest customers. US telecommunications provider AT&T is the largest, accounting for 26% of Amdocs' revenue, followed by Sprint, another US carrier, that accounts for 10% of revenue, and Bell Canada, which accounts for under 10%. According to Amdocs' financial statements for 2012, its ten largest customers generated 69% of its annual revenue.
Amdocs is traded on the New York Stock Exchange at a market cap of $5.7 billion, after a rise of 22.2% in its share price this year.
Published by Globes [online], Israel business news - www.globes-online.com - on December 19, 2012
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