Since its turnaround, Subex has continued to plot an upward course. At the end of July, the Indian giant posted Q1 results that reaffirmed the healthy state of the business; see Subex’s summary here. Following that, August has seen Subex make six positive news announcements in the space of just sixteen days. On the sales front, Subex told us that:
- A Malaysian CSP has renewed their Managed Services contract for Subex’s ROC Revenue Assurance;
- They will supply RA and FMS systems to African group Econet;
- Subex has partnered with IBM India to supply ROC Interconnect Billing to IDEA Cellular, the Indian Mobile CSP;
- Eagle Mobile of Albania has bought Subex’s FMS; and
- Mobinil, the Egyptian Mobile CSP, has replaced their old fraud management system with ROC Fraud Management.
Regarding the last story, further research indicates that Mobinil’s old Fraud Management system was supplied by HP (see here). Two major multinational groups have a significant stake in Mobinil: France Telecom and Egypt’s Orascom. The loss of Mobinil will be a blow for HP whilst it potentially opens more doors for Subex.
I cannot remember ever seeing a similar vendor announce so many sales in such a short space of time. However, perhaps the most positive signal about Subex’s long-term future is the news they will receive an equity injection from the investment vehicle of an unnamed telecom operator; see the press release here. A maximum of 8 million shares will be issued. The agreed price of Rs. 80 per share represents a premium of roughly 45% to the current market. If all 8 million shares are issued, the value of the investment will be approximately USD 13.5 million at current exchange rates. The shares will be issued following AGM approval on September 13. Subash Menon, boss and founder of Subex said of the deal:
This investment from an entity that understands the telecom software sector well vindicates our stand on the bright future of the company. They were particularly impressed with our positioning and strategy around Revenue Operations Centre (ROC) and Managed Services. The fact that they are investing at a price that is significantly higher than the current market price establishes their confidence in the company.
Subex are enjoying an Indian summer. Now it is time for them to make hay, whilst the sun shines.
