New VeriSign division focuses on telecom providers

Internet registry and trust services vendor VeriSign is launching a new division to offer network call switching and billing services to telecommunications companies.

In an announcement today, Mountain View, Calif.-based VeriSign said it has created a new Telecommunications Services Group made up of two companies it acquired in the last nine months -- telecom services vendor Illuminet Holdings and wireless billing company former H.O. Systems. The two companies will now use the VeriSign name.

Cheryl Regan, a VeriSign spokeswoman, said the strategy in acquiring the two companies was to create this new division to service smaller second- and third-tier telecommunications providers that can reduce costs by outsourcing their call switching and billing services.

The new division will join VeriSign's Web identity, secure transaction services and payment services businesses.

Eventually, the company hopes to provide services to telecom providers that will link the existing VeriSign Domain Name System (DNS) computer network to the wireless and wired telephone network for seamless data communications, providing new revenue streams for carriers and new services for their customers, Regan said. VeriSign hopes to develop the connectivity of the two networks by the end of the fourth quarter of this year.

"Carriers need a reliable partner to help them attract and retain new customers, and VeriSign is clearly focused on helping carriers operate efficiently and compete effectively in today's challenging marketplace," said Terry Kremian, VeriSign's executive vice president of telecommunications services, in a statement.

The timing of VeriSign's announcement, though, comes as telecoms across the globe continue to shed jobs and costs due to overcapacity and weakened markets.

And that, said Jeff Kagan, an independent telecom analyst in Atlanta, makes this move less certain for the company.

"They're heading into rough waters, " Kagan said. "This is the kind of move if they made two years ago that would have been applauded and meant a sure bump in their stock price. Today that is by no means a sure thing."

If the company is truly bringing something unique to the marketplace and is filling a niche that is wanting, it could have a chance with the strategy, he said. "But if it's a more generalised offering it would be like a salmon swimming upstream."

As part of the new services, VeriSign is introducing a new technology platform called Advanced Transaction Look-up and Signaling System, to help telecom providers effectively bridge multiple network protocols such as DNS and SS7.

Also being announced today by VeriSign is NetDiscovery, a system that will help telecom carriers facing the June 30 deadline for compliance with the Communications Assistance for Law Enforcement Act. The law requires telecom service providers to support the ability of law enforcement agencies to conduct lawfully authorized electronic surveillance of calls and call data by the end of this month.

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