Sprint (News - Alert) Nextel Corp. late Tuesday announced it has reached a preliminary 8-year agreement with Amdocs to provide a single billing and customer care platform allowing the wireless phone company will migrate off of Convergys’ (News - Alert) Precedent 2000 system over the next two years.

 

The decision comes as a result of the merger integration following Sprint’s acquisition of Nextel Communications, which closed last August. Amdocs (News - Alert) has been Nextel’s billing and customer care systems vendor since 2000 while Sprint began utilizing Convergys back in 1996 for its customer care and billing services.

 

“We have selected Amdocs to support Sprint Nextel because of its extensive experience in the industry and their ability to adapt to our customers' changing needs and the company's growing portfolio of products and services,” said Dick LeFave, chief information officer for Sprint Nextel. “Amdocs will continue to provide Sprint Nextel with a robust billing solution and will enhance our customer experience at critical touchpoints such as customer care, sales and billing.”

 

Although not yet finalized, the agreement sets the framework for Amdocs to service more than 46.5 million wireless subscribers. The new Amdocs' platform will provide Sprint Nextel customer care representatives real-time access to account information for all subscribers on both the Nationwide Sprint PCS Network and the National Nextel Network.

 

Convergys is trying to take the news in stride. In a brief statement issued after the stock market closed on Tuesday, the company said while the Sprint deal generated about $100 million in revenue in 2005, it still wouldn’t back away from its 2006 earnings guidance.

 

“Though disappointed with this decision by Sprint Nextel, we continue to have confidence in [Convergys' Information Management Group] and the prospects for continued revenue and earnings growth across Convergys,” said Dave Dougherty, president and chief operating officer of Convergys.

 

To be sure, while the transition is a clear blow to Convergys, analysts believe it’s also not a grand slam for Amdocs because Sprint had considerable leverage positioning the two companies against one another during the contract talks.

 

“We believe the incremental revenue for Amdocs will be somewhere between $50 and $100 million, as a result of the advantageous position of Sprint Nextel in a very competitive contract negotiation,” said Tom Ernst, analyst at Deutsche Bank.

 

Sprint Nextel expects to begin converting customers to one platform this year. Conversion to the Amdocs platform will commence once Sprint Nextel and Amdocs enter into a definitive service agreement, and expects that the conversion will be complete in 2007.

 

“We have served Sprint Nextel well in a variety of programs over a number of years and stand ready to support them in this transition,” Dougherty said.

 

"Sprint has had a long-standing and successful relationship with Convergys and we now look to their expertise during this time of transition," LeFave said. "Moving to a unified billing and customer care platform will be critical in meeting the needs of our customers and continuing to introduce innovative wireless voice, data and content applications into the marketplace."

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Robert Liu is Executive Editor at TMCnet. Previously, he was Executive Editor at Jupitermedia and has also written for CNN, A&E, Dow Jones and Bloomberg. For more articles, please visit Robert Liu's columnist page.