Hats off to Menon

It has been a tremendous start of the year for Subash Menon, boss and founder of Subex. He has negotiated his way out of the looming overhang of FCCBs, has slimmed the business after the takeover of Syndesis and has got Subex back into profit. So how does he follow up that hat trick of successes? By putting his money where his mouth is and showing his faith in his own business. Like other shareholders, Subash will see his stake in the company diluted by the deal with owners of the FCCBs. To address this, he has bought newly-issued shares, as he explains in this interview. You can also see the video of the interview here. Buying shares is good – it shows confidence in his company – but Subash went a step further still. The shares will be bought at a premium to the market of 30%. In other words, he is buying not at the current market rate, but at the same rate as the FCCB holders agreed as the conversion price for their bonds. It is a magnanimous gesture, an impeccable example of good governance, and a supreme statement about the future of Subex. I take my hat off to Subash Menon.

More good news for Subex followed soon after, with the announcement of a multi-million dollar order for their cost management software by a North American Tier 1 operator. To complete the second hat trick, it looks like the majority of analysts are upbeat about the future share price of Subex, which has had its ups and downs. They are not all positive, but some analysts are very positive about Subex’s future; see here, here and here.

Eric Priezkalns
Eric Priezkalns
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), a global association of professionals working in risk management and business assurance for communications providers.

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. He is a qualified chartered accountant, with degrees in information systems, and in mathematics and philosophy.

4 Comments on "Hats off to Menon"

  1. Avatar luigi mario | 18 Feb 2010 at 1:14 pm |


    Indeed it is a marvelous acheivement.

    Having somewhat understood their strategy plans, I am little sceptical about the way the way they will be reviving. The reasons being:
    Menon is diluting his investment in the company today. But he is also buying more shares, what is the meaning of this?

    Many operators are extremely unhappy about their products. They have lost many deals in the recent past against companies like neural, connxtiva, cape etc etc…
    But business is like that- you win some and you lose some.

    The survival factor of Subex is Menon hiself.

    We need to wait and watch more from Subex before commenting on its current or recent success…..

  2. Hi Eric, did you actually see the financial reports for the quarter or is this a paid ad you do for Subex. Its primarily the other income which contributes to profits reported. when losses on account of forex were bloated as notional so should be the profit on forex. The revenues have not improved they are stagnant.

    • I did see Subex’s financial reports, funnily enough. It really helps when they’re in the public domain, unlike the figures of most of Subex’s rivals. That’s why I’m able to point out when Subex’s numbers are bad, and point out when they’re good. And that’s why I was saying for month after month how bad Subex’s numbers were. Perhaps you missed all those posts? It’s because I saw Subex’s numbers that you’ll see I did some calculations to show how Subex’s EBITDA margin is improving. You do understand the difference between EBITDA, profit and revenue, don’t you? A lot of people in RA don’t, so there is no need to feel ashamed if next time you want me to go slower and explain them to you like I would to explain them to anybody who struggles to understand how one can go up whilst another goes down. Because I am an accountant, a real accountant, you’ll also see I’ve written about the effect of exceptionals on Subex before: talkra.com/archives/382. As for revenues being stagnant, I can’t imagine a more boring and pointless observation about Subex’s business. Some businesses deliberately reduce their revenues in order to increase profits. Others have soaring revenue growth and become insolvent as a consequence. Only a total jackass measures the worth of a going concern based on revenues alone. Revenues would only be a useful measure in isolation if the business being valued is a strictly speculative short-term investment i.e. the kind of company that is run to rapidly accumulate customers by offering them a sub-standard product and, as soon as is possible, the company and its customers are sold to a proper business who can then fire all the employees and migrate the customers on to another product. Is that a business model you’re familiar with?

      But really we should stop boring everyone. You should just tell me who you are so I can analyse your business’ numbers. That is, if they are public. If they’re not, it would be really cool if you sent me over a copy so I can share with the readers what EBITDA margin your company has been making recently.

  3. Avatar luigi mario | 25 Feb 2010 at 1:14 pm |


    Let us not make this forum as a criticizing point. We are more worried about the operators standpoint today than the actual figures of subex. I for one completely agree with eric. But where I would like to disagree is their capabilities. I am very sure that the products subex supply need a quick improvement.

    Their features given are more of marketing gimmick. When i used to head the RA department of a leading telco( I dont want to make mention of this), I have had encountered issues as well.
    After all what is a company that promises the delivery of something which actually doesnt exist or doesnt deliver up to its capability.

    While, this forum shouldnt be encourage for an argument, it should definetely encourage the debates on the various issues that operators face thanks to the false promises by such companies…..

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