Advent International has led a DM10m (E5.1m) investment in Computer Telecoms AG ECT a German manufacturer of PC-based switches for telecommunications companies.
ECT’s services include prepaid calling cards, free or premium rate service numbers, personal numbers, interactive voice response, unified messaging and advertising telephony. The company estimates that the market for softswitches will rise from virtually nothing today to $4bn- $6bn by 2004. The company’s softswitch, AutoCarrier, has already been sold to 55 customers in eight countries. The new investment will be used to complete development of three new products and for expansion into additional European markets, including Scandinavia and Spain.
Since the liberalisation of European telecoms markets, there has been a market for small, scalable switches that allow users to provide a range of added value services. Softswitches, such as those made by ECT, use PC servers with special telephony modules, which allow functionality and features to be based on open software rather than on proprietary systems. The innovation of this technology is similar to the change from mainframe computers with proprietary hard and software to standard PCs and open software.
Jan Janshen of Advent International GmbH Frankfurt, said: “This is a very attractive industry with a large market. ECT, which is led by an experienced entrepreneurial team, has the potential to be a leading provider of next generation services. The company is already profitable, has a strong new product pipeline and should achieve its objective of an IPO in the next twelve months.”
ECT’s customers include Smart Telecom, Tele2 and Telecom One. 1999 turnover of DM 12m produced operating profits of DM 5.2m. The company says that 2000 figures will be even stronger.
Dr Marshall Kavesh/font> and Dr Hans Huber founded ECT in 1998. The company is headquartered in Munich, Germany. It also has branch offices in the UK, France, Belgium, the Netherlands and Austria.