Siebel Gets Blamed for Cell-Phone Glitch

An analyst says software installation caused service problems with the carrier's GSM accounts.
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AT&T Wireless

(AWE)

customers cannot activate new GSM cell-phone accounts or make changes to existing GSM service because of a glitch that a Wall Street analyst is blaming on an upgrade of software from

Siebel Systems

(SEBL)

.

AT&T said the problem began when new software was installed last Saturday, but would not confirm that the glitch occurred in a Siebel product. "We've made substantial progress in fixing it, and service will be restored sooner rather than later," said AT&T spokesman Mark Siegel.

If indeed the problem were caused by a Siebel product, the timing couldn't be much worse. Currently in the midst of a restructuring, Siebel is struggling to fend off competitors such as

SAP

(SAP) - Get Report

, and

SalesForce.com

as well as convincing customers that its business software is reliable and cost-effective.

Customer relationship management software, or CRM, is used to manage information about customers and their accounts. It became very popular during the Internet bubble, but many companies later found that CRM vendors delivered buggy products that failed to produce a return on investment.

According to Siegel, the malfunction blocked access to customers' GSM accounts.

"No matter who supplied the software, we own it now and will fix it. We don't talk about our suppliers," he said in an interview.

AT&T Wireless has 3 million GSM customers, the company said. Customers whose service has already been activated could use their GSM despite the problem, but could not make changes to the service, Siegel said. GSM stands for global system for mobile communications and is one of the top emerging standards of digital-cellular service.

A spokesman for Siebel confirmed that AT&T Wireless is a customer, but referred all other questions to AT&T.

However, analyst Patrick Walravens of JMP Securities, said in a note to clients that the problem occurred during an upgrade to a new version of Siebel's CRM software.

"The timing is really unfortunate for Siebel," he said in an interview. "After a lot of problems, it seemed like they were making progress." JMP does not have a banking relationship with Siebel, and Walravens recently upgraded the stock.

New CRM installations are often bumpy, the San Francisco-based analyst noted. "But you don't usually see systems that are already up and running fail. When it went down, it took part of AT&T's business with it. This is unusual."

Walravens also speculated that the recent resignation of Karen Riley, Siebel's SVP of Global Services, may have been related to the AT&T problem, but the company denied that.

Riley, said a spokesman, is "retiring from the company" for reasons that are unrelated to AT&T and will be replaced by Herb Hunt, a Siebel executive.