CSG eyes further M&A as it sweeps Tango Telecom off its feet

• CSG opens its wallet to acquire Irish partner Tango Telecom
• Dynamic policy control capabilities will be added to CSG’s BSS portfolio
• CEO says more M&A is on the cards to help fuel further growth

Revenue management systems vendor CSG has added to its technology portfolio, Irish workforce and customer base with the acquisition of real-time policy control and messaging platform specialist Tango Telecom for an undisclosed sum.

And the takeover of Limerick, Ireland-based Tango is just the first step (geddit?) of an M&A-fuelled growth spurt that CEO Brian Shepherd (pictured above), who took on the role at the start of 2021, hopes will help it to challenge BSS sector behemoth Amdocs for the market leadership position. 

Shepherd knows that’s a tough task – he used to work at Amdocs, so he knows how formidable a rival it is. And given that CSG is a revenue run-rate of about $1 billion per year, less than a quarter of Amdocs’s turnover, Shepherd might need to strike some very large takeover deals if he’s to achieve that aspiration.

But he says he’s open to large M&A deals as well as the kind of small, strategic takeover that brought Tango Telecom and its headcount of 80-or-so staff on board this month. 

“We expect be an aggressive, disciplined acquirer of great technology and great solutions to continue to round out our portfolio, so we can be that one-stop-shop for customers, if they want that,” says the CEO, who confirms that much larger acquisitions will also be considered. “We don’t limit [on size]… strategic fit, cultural fit, financial fit, and risk return profile are the criteria we use, and you'll see us do acquisitions on the larger scale, you'll see us do acquisitions on the mid-size, you'll also see us do small to mid-size, or even aqui-hires… you'll see us do acquisitions across the range of size, and some will be more legacy in nature, some will be more about disruptive new technology – it's about the value that we stitch together with our technology to accelerate how we solve our customers problems,” added Shepherd.

But it’s not just about adding scale: Shepherd believes CSG’s approach can help it to grow organically too. “We design our products in a modular approach that gives the choice and the flexibility to the customer… the fundamental platform and principle for us is to solve our customer's toughest business problems. [If we] do it easier and better than anyone else, they'll come back, and that is something that differentiates us – how we show up, how we do business, and how we bring value to our customers… we come at this from a product platform-based approach, not throwing services and bodies at it, and we think that brings agility, cost-effectiveness, proven out-of-the-box capabilities, because we want our customers to be successful and not change order them to death,” he added, clearly making reference to the methodology of his much bigger rival.

And that modular approach – does this involve making CSG’s products available via public cloud platforms? Absolutely, says the CEO, who notes the company has been cloudifying its BSS tools for years and has its products available and running on AWS and Azure (Though not yet on Google Cloud). 

Overall, Shepherd’s aim is to grow the company further not only in its tried and tested cable operator and telco markets: “We are diversifying our industry vertical revenues and we're serving large government, retail, healthcare, financial services, because they also need to completely rethink and evolve their digital engagement with their consumers, and that's a cornerstone focus of CSG’s,” he notes. And the company is already active in those industry verticals: In the first quarter of this year, CSG generated 25% of its $253.1 million in sales from such verticals. 

But “the strategic number one for us is to become and be the number one technology provider of choice for cable and communication service providers globally,” notes the CEO, and to do that the company is “being much more aggressive in everything we do, from sales, to partnerships, to product developments, to bringing more impact to our customers,” says Shepherd. 

Partnerships are key to CSG: Tango Telecom was a long-time partner and had been part of integrated technology wins at a number of telcos recently, notes the CEO, who puts a lot of focus on culture and the right ‘fit.’ In an industry where so many acquisitions don’t work out, most often due to a lack of cultural and strategic fit, one can hope that CSG approach will lead to a successful outcome for the Tango deal.

- Ray Le Maistre, Editorial Director, TelecomTV