Author: John Abraham, Principal Analyst
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Publish date: 23 July 2024
Cover Photo by eberhard �� grossgasteiger on Unsplash
INTRODUCTION
The telco Digital Enablement segment, which primarily includes monetisation and customer experience functions, continues to register steady growth in CSP spending which is set to increase from $31.7 billion in 2024 to $35.3 billion by 2028. Never before have the front and back-office functions been as critical for CSPs. While network infrastructure continues to dominate telco spending, there is growing emphasis on transforming the customer experience through seamless interactions and customer journeys.
CSP interest in transforming BSS is driven by three key factors. Customer preferences are rapidly evolving, in part driven by their experience engaging with “digital native” companies. This factor is also key in shaping public opinion, which is considered important for publicly listed operators. Second, competition from new entrants and other operators who have transformed their engagement experiences forces CSPs to accelerate their own transformation journeys. And finally, CSPs are keen to exploit the cost efficiency that comes with improving self-service and also through replacement of customised legacy systems with modern cloud-based solutions which require far less maintenance.
This profile discusses CSG, a key vendor in the BSS segment with offerings in both monetisation and customer engagement segments.
COMPANY OVERVIEW
CSG is a global provider of monetisation, customer experience and payments solutions across multiple verticals. The company’s genesis was as a provider of software and related support services to US-based cable companies in the early 1990s. CSG has since evolved to become a provider of software solutions to multiple industry verticals.
Name
CSG
Year founded 1982
Headquarters Englewood, Colorado
CEO Brian Shepherd (since 2021)
Company Type Public
Employees 6200
Geographic focus Global
Source: CSG
In the telecommunications industry, which accounts for the majority of the company’s revenues, CSG has extended its capabilities in the past decade, investing in portfolio R&D as well as M&A, to provide its CSP customers a comprehensive portfolio that spans front and back-office functions (figure 1).
1: Overview of CSG solution platform
Source: CSG
Financials
CSG is a publicly listed company, trading as CSGS on the Nasdaq stock exchange. In its most recent completed fiscal year (2022-23) the company reported a 7.3% revenue increase year-on-year to $1.17 billion.
Acquisitions
CSG has been quite successful in leveraging acquisitions as a means for growth. Key acquisitions are listed in table 1.
2021 Tango Telecom
2021 Kitewheel
2021 DGIT
2018 Forte Payments
2018 Business Ink
Provider of policy control and messaging capabilities
Provider of customer journey orchestration and analytics.
Provider of configure, price and quote (CPQ), and order management solutions for the telecom industry.
Provider of payment solutions to merchants and developers.
Business Ink provides business communications services to many market segments including healthcare, financial services, professional services and utilities
Year Target
2013 Volubill
2012 Ascade
2010 Intec
Customer Traction
Description
Provider of integrated real-time policy and charging solutions to CSPs.
Provider of trading and routing software solutions to CSPs.
Intec was a leading supplier of billing, mediation and settlement software systems to telecom operators.
CSG serves more than 900 clients worldwide across 120 countries. Comcast and Charter each represent approximately 20% of the company’s revenues today. The company recently reported that more than 30% of its revenues are generated outside the telecommunications industry. Even as CSG continues to invest in expanding its footprint in the telecommunications industry, the company also continues to explore opportunities to take its expertise to adjacent enterprises in similarly complex industries
Below is a partial list of key CSP clients.
Customer Description
PLDT expanded its two-decade partnership with CSG as it embraced the power of the cloud to future-proof its business and transform its customer experience, particularly for its enterprise unit. This large-scale transformation empowers PLDT Enterprise with a cloud-based, unified billing and revenue management solution that enables streamlined processes across its business segments, minimizes costs and shortens time to market.
M1 Singapore
M1 Limited, Singapore’s first digital network operator, selected CSG’s cloud-native platform to improve efficiency and tap into new revenue streams across industries. This transformation is expected to help future-proofs M1’s enterprise business and also boost the customer experience.
With CSG’s revenue management solutions and services, MTN South Africa has transformed its wholesale, managed network services, carrier and retail billing processes into an efficient managed service operation underpinned by a modern, platform-based digital ecosystem.
Three Group Solutions Three Group Solutions deployed CSG Ascendon as its BSS to manage billing, payments, customer support, and reporting for its MVNO customers.
Source: CSG
Partnerships
Partner Description
AWS CSG is an AWS Advanced Technology Partner and participates in the AWS ISV Accelerate Program.
Microsoft CSG is one of Microsoft’s global ISV partners and won the 2020 Partner of the Year Award for Media and Communications. The partnership focusses mainly on Microsoft Azure and OpenAI generative AI technologies.
NTT Data Strategic Partner to support advanced CX analytics.
teneo.ai Technology partnership for AI Intent Modeling & NLP.
QPC Strategic partner that includes the bundling of QPC Tracxion with Xponent to create “Tracxion Decide” to enhance CCaaS offerings.
Merkle Journey and decisioning consulting partnership for large clients with complex orchestration needs in markets spanning financial services, retail, entertainment and more.
Virtusa Large system integrator partnership for next best action, personalization and journeys.
Intel CSG is part of the Intel Partner Alliance (IPA)
Source: CSG
Product overview
CSGs portfolio of offerings spans 3 main segments:
1. Customer experience solutions - this includes products and services that are mainly front office relating to or impacting customer interactions that allow organizations to engage with customers at the moment that matters most, via their preferred channel. Examples include customer journey orchestration, journey analytics, engagement channels etc.
2. Revenue management and Digital monetisation solutions – this includes products and services that are back-office functions enabling CSPs to launch and monetization new digital services to compete in the digital economy. Examples include converged billing & charging, marketplaces, mediation, wholesale and partner management, including settlements, etc. Related functions such as CPQ, catalog, order management and orchestration are also tracked in this segment.
3. Payment & Merchant services - this includes products and services that are related to payment processing, allowing organizations to accept payments when, where and how their customers want. Examples include ACH payments, credit and debit card processing, POS, mobile payments, payment gateways, etc.
CSG - Rise of a telco BSS heavyweight
Figure 2: An overview of key aspects of CSG product strategy.
Source: CSG
The key solutions of CSG’s telco portfolio are discussed below.
CSG Ascendon
CSG Ascendon is a cloud-native SaaS-based revenue management and monetisation solution. Its capabilities include catalog, billing & charging (including recurring billing), offer and subscriber management, payments, customer support tools, and reporting analytics dashboards.
Figure 3: Overview of Ascendon
Source: CSG
Introduced to the market in 2015, Ascendon is one of the first solutions in the market to support SaaSbased monetization. Ascendon allows CSPs to deploy swiftly with seamless migration and out-of-thebox support for all business models. Ascendon is also integrated with CSG’s Quote & Order solution to support more complex B2B business models and with CSG Xponent to drive customer engagement. SaaS
offers a distinct advantage to CSPs through regular updates to the Ascendon platform, which enables faster access to the latest technology, including AI, while reducing downtime and costs.
CSG claims Ascendon accelerates go-to-market by up to 85% (compared to traditional systems). Thanks to its architecture framework the Ascendon platform can also help improve operational resilience and scalability and is claimed to improve conversion rates by up to 30% thanks to AI-driven personalization.
CSG Xponent
CSG Xponent is CSG’s customer engagement platform that is designed to manage, track and support customer journeys and interactions across channels. CSG was an early mover among the large BSS providers to offer a tailored CX solution to navigate the complexities associated with building brand loyalty and retaining customers.
A SaaS-based solution, the Xponent platform enables 360-degree view of customer data, flexible segmentation and activation, and campaign journey mapping and planning It also includes an intelligent decisioning and orchestration engine, discovery analytics and support for all key engagement channels. Xponent offers out of the box integration with a variety of applications ranging from content management systems, data enrichment solutions, AI and analytics solutions, campaign management solutions etc.
Source: CSG
To accelerate time to value, Xponent Ignite offers pre-built journeys out of the box for the following industries:
1. Financial services 2. Healthcare 3. Retail 4. Telecom
CSG recently introduced Bill Explainer, an AI-driven solution that enhances consumer bill comprehension using intuitive explanation of the bill. The product is designed to anticipate and prevent bill shock. Bill Explainer leverages Microsoft Azure OpenAI Service to personalize consumer bill insights, delivering proactive communications to help consumers easily understand what’s changed in their bill that helps reduce confusion for customers which can increase long-term loyalty.
The Bill Explainer is mainly focused on the telecommunications vertical and is expected to help CSPs to improve their overall CX, while delivering ROI. CSG claims CSPs who have deployed Bill Explainer have reported a reduction in their call center traffic volumes leading to up to 30% lower contact center activity. For some CSPs the Bill Explainer is claimed to proactively address up to 50% of billing-related calls. Bill Explainer also provides a faster time to payment with features like one-click payments, with a claimed click-through rate of up to 28%. CSG claims CSP customers have reported increased speed to resolution with connected gateways to payment and bill comprehension, spending 60 seconds on selfservice as opposed to 7 minutes or more with an agent.
CSG Digital Partner management
CSG Digital Partner Management is one of the industry’s most widely deployed SaaS-based partner management platforms with a presence at more than 250 customers including top 20 operator groups.
Source: CSG
The solution is designed to protect margins at every stage of the partner lifecycle and is claimed to minimize revenue leakage to less than 1% and improve dispute resolution by up to 80%. Key drivers for CSPs selecting the solution include faster time to market from onboarding to launching partner
offerings, flexible revenue share models and faster revenue recognition and settlement. CSG claims to improve efficiency through a unified system for managing partner onboarding, agreements, billing, TAP and BCE roaming. This also results in a notable reduction in operational costs.
CSG Advanced Convergent Platform (ACP)
CSG ACP is a BSS solution for cable, satellite and broadband providers in North America with a dominant market share, claimed to be more than 75%. ACP is deployed at broadband, cable, and satellite providers to streamline billing and customer care, driving increased ARPU and operational efficiency. The solution offers extensive configurability to suit broad requirements of service providers. The ACP platform currently supports more than 75 million subscribers and over 125k agents worldwide.
ACP is sold today as a private SaaS platform and supports capabilities including Agent Desktop, Reporting and Analytics, Catalog and Order management, Smart Notifications, Sales and Payments and Billing. High cost and complexity of legacy systems and CSP initiatives to accelerate adoption of modern architecture frameworks are key drivers for continued spending on the ACP platform. Key customers of the ACP solution include Comcast, Charter Communications, Mediacom and Bell.
Figure 6: Overview of CSG’s ACP platform
Source: CSG
CSG - Rise of a telco BSS heavyweight
CSG Encompass
CSG Encompass is a flexible, scalable and modular revenue management solution. Encompass is designed to adapt and evolve to support changing business needs, supporting any deployment model and a broad array of use cases (B2B, B2C, B2B2X and IoT). The Encompass solution is customizable to streamline the creation, delivery, and monetization of digital services.
The Encompass solution enables CSPs to seamlessly expand their portfolios and unify commerce journeys with their partners and customers by reducing complexity of B2B2X ecosystems. Encompass can be deployed in a public/private cloud or on-prem depending on requirements and is integrated with CSG’s Quote & Order solution.
Encompass capabilities include catalog, order management, converged billing & charging and customer care. CSG Encompass is also cost efficient; a CSG customer is claimed to have realized 20 percent savings in cost to serve with CSG managed services.
Source: CSG
CSG Quote & Order
CSG Quote & Order is designed to help companies to close deals faster and ensure profitability with a streamlined catalog-driven quote-to-cash cycle, interoperability and self-service capabilities. Quote & Order manages the quote acceptance process and any relevant contract details. CSPs can give their customers and partners visibility across the entire quote to order process with any changes and updates automatically recorded.
The solution is tailored to address complex, multifaceted requirements that are especially common in telecom environments. Zero-touch processing is supported through omnichannel-assisted and selfservice channels. Quote & Order is compliant with TM Forum Open APIs and ODA along with MEF standards to enable B2B partnering at the scale needed for 5G-enabled offerings.
Quote & Order enables predictable profitability throughout the entire deal lifecycle, from initial bids to final billing, by offering real-time visibility into margins. CSG claims some of its Quote & Order customers are reporting faster activations (from quoted to active in 40 seconds), smoother migrations (completed in just 12 weeks), and up to a 30% improvement in design time processes.
CSG Payment Solutions
CSG’s payments platform, CSG Forte, is a leading provider of payment solutions with over 20 years of ACH and card processing experience. CSG Forte supports over 7 gateway connections and dozens of bank originators and serves more than 114,000 merchants in North America. CSG’s payments platform is scalable and includes a suite of payment processing solutions and services for enterprises, merchants, independent software vendors and payment facilitators. CSPs who engage with CSG have access to fullservice payment, customizable integrations, robust payments security, comprehensive state-of-the-art reporting, and efficient compliance management.
Source: CSG
Competition
CSG competes with traditional vendors like Amdocs, Netcracker, Oracle, Ericsson, Nokia and more recent entrants such as Aria Systems, Compax and Zuora.
- Rise of a telco BSS heavyweight
Appledore Analysis
Transformation of the telecom front and back-office segments remains strategic priorities for CSPs worldwide. The spending in this segment is primarily driven by two key factors. In the case of customer engagement systems, the emphasis is on reducing support costs and improving customer experience by digitizing CSP channels and customer touchpoints. In the case of monetisation platforms, the focus is on simplifying complex architecture frameworks that are an impediment to cost efficiently supporting new use cases and also to be future-proof by adopting capabilities for multi-dimensional business models in B2B and B2C.
CSP spending patterns have also been influenced by the emergence of GenAI, which has notable implications for CX in the short term, margin pressures and rise of multi-modal competitive forces.
CSG, with its broad portfolio that was strengthened in recent years through a series of strategic acquisitions, is well positioned to capitalize on both these industry trends. The company also has the advantage of having more than 500 CSP clients worldwide across all tiers, which provides them access to the leading edge of telco transformation attitudes.
CSG has made commendable progress in transforming itself from a provider of cable billing solutions into a heavyweight BSS solutions vendor with growing interests in selected enterprise verticals including financial services and healthcare. The company’s revenue graph has been on a steady upward trajectory in recent years, which is in contrast to an otherwise muted market environment.
CSG aims to become a dominant SaaS provider in the telecommunications vertical, leading with strong revenue management capabilities to support B2C and complex B2B markets combined with Quote & Order, Customer Experience and Digital Partner Management solutions for supporting CSP’s marketplace and ecosystem initiatives. The company is also well positioned to respond to 5G with its 5G-ready monetisation portfolio and has a unique opportunity to guide CX transformation through the support of the Xponent Platform.
SWOT Analysis
Strengths
• Broad portfolio of offerings especially in telco B2C and B2B, that overlaps each other to some extent providing multiple entry points for CSPs across tiers.
• Strong customer base of 900 clients (including more than 400 CSPs) across 120 countries that provides the company multiple options to cross and up-sell.
• Healthy and growing non-telco business, providing the company vital exposure to enterprise verticals
• Strong technology foundation that positions the company’s portfolio well for future.
Weaknesses
• CSG’s visibility is not on par with other leading competitors for their recent portfolio additions, especially outside of core markets
• A handful of customers account for majority of revenues
Opportunities
• CSG has a strong portfolio that is well positioned to address the growing demand for lead to cash enterprise engagement solutions by CSPs
• CSG has a strong suite of solutions to address telco CX related opportunities especially related to Customer Journey Orchestration
• CSG is doubling down on SaaS-based solutions, which will become an important driver for new engagements in the medium term.
Threats
• Increasing competition in the telco segment, thanks to the entry to enterprise specialists and also new startups on the back of public cloud companies.
Summary
CSG is well-placed to capitalize on the wave of new spending on BSS systems, forecast to rise to $35.3 billion by 2028.
CSG’s heritage in serving a swathe of CSP customers across all tiers for over four decades, and its steady expansion of offerings to span the entire BSS suite has been widely acknowledged by CSPs. Additionally, their recent acquisitions have further expanded their customer base and portfolio footprint and also helped them make greater inroads into enterprise verticals.
CSG's solutions offer a compelling value proposition for CSPs facing a complex and evolving market. Their focus on B2B enablement, AI integration, customer experience optimization and cloud-native agility positions them well as a strategic partner for CSPs seeking to navigate a critical period of telco transformations with implications especially for front and back-office functions
Insight and analysis for telecom transformation.
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