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Site map Haaretz Daily Newspaper - English Internet Edition Sites

The Israeli telecommunications billing giant Amdocs (NYSE:DOX) is in talks to cooperate with its Chinese competitor Asiainfo (Nasdaq: ASIA), which develops software for billing and messages.

Capital market sources say Amdocs is also examining an option to acquire the company in its bid to penetrate the Chinese and Asian telecommunications markets where Asiainfo is the dominant player. The deal would likely carry a much higher price tag than Asiainfo's current market value of $175 million.

Amdocs denied plans to buy the company outright, but noted that it has recently examined several cooperation options with Southeast Asian companies.

In recent years, Amdocs has considered the Chinese market a central target and has sought cooperation agreements with Chinese telecommunications companies and local distributors.

With $1.2 billion in its kitty, Amdocs could afford to expand operations even by buying Asiainfo. Such a purchase would allow Amdocs access to a substantial Chinese market share, one that is growing rapidly while U.S. and European telecommunications budgets are at a standstill.

Asiainfo went public on Wall Street in March 2000, raising $120 million at a company value of $300 million. Since then, it has been mentioned as a candidate for sale a number of times, but the reports were never confirmed by management.

Asiainfo's revenues dropped 35 percent against the same period in 2001 to $97.7 million for the first nine months of 2002. The company's net profits were $5.5 million.

Asiainfo's client list includes almost all the Chinese telecommunications companies, including China Mobile, which last week signed a customer relationship management agreement with the company, and China Unicom.

The Beijin-headquartered company establishes communications and Internet infrastructure in the 32 provinces of the People's Republic of China, constructed China's Internet backbone and develops billing systems.