Q1 Revenues: ECtel Down, WeDo Up

Israeli revenue assurance vendor ECtel have announced their Q1 results today. They make fairly dismal reading. Despite previous optimism that 2009 would be good for revenue assurance, ECtel reported revenues of just US$3.4m, compared to US$6.5m in the same quarter of 2008 and US$4.8m in the last quarter. ECtel’s statement is upbeat about orders and highlights their improved gross margins compared to the previous quarter, but they would doubtless prefer to report a lot more of the same kind of lower-margin sales they made in 2008. Costs have been cut, but this has only helped to keep operating losses to a relatively constant rate. ECtel’s performance might look a lot healthier if the US dollar strengthened further, because its income is weighted to the dollar relative to its cost base. Even so, the challenge will be to turn the current order backlog into cash and get closer to the promised break-even later this year.

In Portugal, there was quite a different story following the announcement of the Q1 figures from Sonaecom, parent group to revenue assurance vendors WeDo. Buried in the numbers were the statements that WeDo enjoyed 5.7% sales growth compared to last year, and that WeDo’s revenues account for about 67% of the service revenues of the Sonaecom SSI division. That equates to WeDo sales of €10.4m in Q1, and a rise of €0.5m compared to the same period in 2008. Two highlights were the expansion into other sectors as well as telecommunications, and that 58% of sales were from overseas. However, with the very limited financial data available about WeDo, it would be just as easy to note that there is no way to tell how much of the growth in revenues came from sales made outside telecommunications, and how reliable these revenues will be in future. WeDo also compares negatively to its competitors when it comes to true international diversification, with over 40% of revenues still being earned from its domestic market.

Eric Priezkalns
Eric Priezkalnshttp://revenueprotect.com

Eric is the Editor of Commsrisk. Look here for more about the history of Commsrisk and the role played by Eric.

Eric is also the Chief Executive of the Risk & Assurance Group (RAG), an association of professionals working in risk management and business assurance for communications providers. RAG was founded in 2003 and Eric was appointed CEO in 2016.

Previously Eric was Director of Risk Management for Qatar Telecom and he has worked with Cable & Wireless, T‑Mobile, Sky, Worldcom and other telcos. He was lead author of Revenue Assurance: Expert Opinions for Communications Providers, published by CRC Press.

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