Amdocs Ltd. (DOX), a leading provider of customer relationship management and billing software to communications service providers, has been selected by the U.S. telecom giant AT&T Inc. (T) to provide billing solutions to AT&T’s connected car service, Drive Studio.
Amdocs’ existing partnership with AT&T will help the telecom giant to enhance its connected car services through proper billing and improved customer relationship. Moreover, it will allow AT&T to split its connectivity expenses.
Connectivity expenses mainly comprise navigation and entertainment charges. Thus, offering a split billing methodology to its subscribers will enable auto OEM’s to deliver an array of promotional services to its customers (free Internet music or navigation for a year), thus driving subscriber growth going forward.
A few months back, Amdocs won several major contracts, comprising two in the emerging markets of Brazil and Indonesia and one in the economically volatile Europe. Amdocs’ business opportunity in the U.S. is more visible after renewal of long-term contracts with several leading telecom and cable TV operators like Comcast Corp. (CMCSA). Moreover, it has signed a 5-year global managed services agreement with Vodafone Group plc. (VOD) which will help the carrier to optimize its customer care and billing services.
In the fourth quarter of 2013, Amdocs reported mixed financial results with the top line lagging the Zacks Consensus Estimate and the bottom line meeting the same. The company is performing well in the North American market and the emerging markets of Southeast Asia and Latin America.
Such a strong growth momentum coupled with continuous contract wins has encouraged management to present a strong outlook for fiscal 2014. For fiscal 2014, total revenue is expected to grow 4%-6% year over year while Non-GAAP earnings per share are projected to rise 6%-9% year over year.
Amdocs currently has a Zacks Rank #3 (Hold).
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