Software developer

SupportSoft

(SPRT) - Get Report

surged 16% Thursday after the company expanded its relationship with giant telco

BellSouth

(BLS)

.

The Redwood City, Calif., maker of service-management software said it would develop software tools to help automate the activation and ongoing support for BellSouth's next generation of digital-product offerings. Those will include wireless and wireline services, voice-over-Internet protocol and bandwidth on demand.

Advanced digital services like VoIP are expected to be a huge opportunity for regional Bell phone companies like BellSouth,

Verizon

(VZ) - Get Report

and

SBC

(SBC)

. The companies have seen a sharp drop in their core local phone business and are in need of new growth vehicles. A key strategy at the Bells has been to bundle new services such as fast Internet access along with wireless and wireline phone offerings.

"BellSouth has demonstrated a unique ability to successfully scale to meet the service requirements of its retail broadband subscribers, while maintaining its recognized telco industry leadership in customer satisfaction," said SupportSoft chief Radha Basu. "With this expanded relationship, we will have the opportunity to work with a visionary leader in defining and delivering service and support automation products for a new generation of digital services and help them to raise the bar for their competition."

On Thursday, SupportSoft shares jumped $1.15 to $8.21.