Five years of European schooling and a $5 million marketing
budget have lured Jones Cyber Solutions back to the United States.
Heady from Paris-based customer Cegetel Le 7's
announcement of hitting 1 million customers today (Sept. 20), JCS will launch an
"aggressive" campaign to market its billing- and customer-care-solutions
business in the United States, Jones International Ltd. chairman and CEO Glenn Jones said.
"Others have tried and not reached the promised land
with intelligent systems," he added. "We have something that works, now. If we
want to be a winning company in the 21st century, we had to build [JCS], and
it's completely transferable to the U.S. market."
JCS is a customer-care-management system designed for
telephony, cable, Internet and other metered-use services.
JCS and its marquee product, ICSS (Intelligent Customer
Support Systems), failed to secure a domestic foothold when it launched in 1994.
When Canadian telecommunications giant BCI Telecom Holdings
Inc. (BTH) bought 30 percent of MSO Jones Intercable Inc. later that year, JCS slipped
quietly into the European market, partly because its customized system depended on the
full-scale convergence of cable and telephony, which didn't happen.
"It caused us to shift focus," JCS vice president
of business development Del Guynes said. "The promise of convergence never really
happened, and the convergent market in the United States wasn't maturing, so there
were more opportunities offshore."
Jones Intercable had been testing ICSS in Buffalo, Minn.,
but it pulled the plug in late 1997, citing the decision to sell the 14,000-subscriber
cable system there. Jones Intercable and JCS later reported taking a $14.2 million
write-off in late 1997 to absorb the cost of ICSS development.
Tele-Communications Inc. had similarly abandoned its own,
more expensive in-house billing project, dubbed "SummiTrak." TCI (now AT&T
Broadband & Internet Services) sold the technology to CSG Systems International Inc.
in 1997 as part of a 15-year exclusive affiliation with that vendor.
Jones also cited the strained relationship between Jones
Intercable and BTH, which is affiliated with telco Bell Canada.
"It was an antagonistic relationship with Bell Canada,
and they had a customer-care solution of their own that had to be redesigned," he
said. "They never gave us their blessing for JCS' integration into the Jones
BTH, of course, ultimately sold its Jones Intercable stake
-- including the right to buy control over time -- to Comcast Corp., which then bought out
With JCS' re-entry into the United States, however,
Jones believes the tweaking and experience it received in Europe will qualify it to
compete in a crowded, but fertile, U.S. customer-care-management market, while continuing
its overseas presence.
"Scalability is the issue. This [customer-care
solution] has to be scaled, and we've accomplished that. We'll be announcing new
relationships soon, and when the smoke clears, we want to be there," Jones said.
Getting there won't be easy, however. Incumbent
players such as CableData Inc., Convergys Corp. and CSG dominate the billing- and
customer-care-solution segment. They not only offer end-to-end billing and customer-care
systems, but customizable solutions similar to JCS, as well.
"In the past 18 months, we've developed 10 to 15
products for customer-care and billing solutions," CSG vice president of product
management Grant Gabrielson said, "and all of them are complementary to billing
CSG is also well connected, with customers such as AT&T
Broadband, Time Warner Cable, EchoStar Communications Corp. and Adelphia Communications
Because of JCS' customer-care-specific approach, which
doesn't include a billing engine, alliances with billing services are part of its
business strategy in the United States. "We'll have to partner with
billing-engine companies, such as Kenan Systems [Corp.], and we expect to be in the
smart-card business, as well," Guynes said.
Just how competitive JCS will be in the burgeoning U.S.
customer-care and billing market, and how far its $5 million will go toward cracking that
market, are uncertain. What is certain, however, is that the competition won't be
going away anytime soon.
"The competition in this whole billing and
customer-care space will require companies like CSG to add custom products and handle
multiple product lines," Gabrielson said. "There's much more than just the
cable industry now, and customers are involved in businesses they've never been in
JCS will spend about $5 million for a yearlong image
campaign, Jones said. It will include print advertising, marketing, speaking engagements
and exhibitions at 10 cable-related conferences.
Jones added that JCS will ramp up its hiring to include a
vice president of sales and a marketing vice president, along with a
"substantial" number of additional employees beyond the current 120 staffers.
"This is not a shotgun approach. We'll do
whatever it takes and have the capital to do it. We'll be our own venture
capitalist," he said.