For the uninitiated, Syntonic is providing services to the mobile telco industry, but recently, they have become a service provider with the recent launch of their own OTT (over the top) service. OTT is the new means of digital online streaming independent from broadcasting networks, and it is being adopted by the major telcos as a means to replace their loss of call and texting business.
This is noteworthy because online entertainment is very rapidly displacing other traditional means of home entertainment, like TV, and as mentioned above, mobile streaming is becoming the new norm. This rapid change has caused many problems, but creating new opportunities for those in the right space. Such an environment is well and truly showing the signs for disruption, as already the old ways of telco earnings has rapidly floundered, while others, like Netflix, have filled the void of customer demand with their online content. Now however, the major telcos are playing catch-up. All the US major telcos are jumping on the online entertainment bandwagon, and they can successfully do so for one simple reason: they own the infrastructure.
Now they are building platforms to deliver content, buying content houses, and attempting to massively acquire new users such as in the case of the Yahoo and AOL. In a few short years, and make that months in certain cases, Verizon and AT&T for example, will dominate the US OTT industry, and Syntonic's CSP will be driving a lot of it, as we believe that Verizon for example, will white label SYT's Overdrive - their OTT - for their 140 million subscribed users, and their potential 1B+ user base. Regardless of how Verizon launch an OTT, the CSP will be behind it. This we know for sure.
Tata Communications owns the wires for 23% of the world's internet traffic, and they were first to white label the CSP over a year ago, although they are only launching it now in SEA and the US. Anything to do with sponsored data though on these wires brings revenue to Syntonic. So what is sponsored data?
SD is when a third party pays for your data. This is becoming a popular means for content providers to ensure a strong user base. It is the user base that brings them their revenue through advertising and not the cost of selling data to them. Those familiar with digital marketing will appreciate this fact. Syntonic brings their CSP platform to mobile users via Freeway, Overdrive, and Dataflex (yet to be officially launched).
Freeway enables content providers to host their apps, allowing for the providers to sponsor the data or return data as a gift. Freeway has attracted many of the world's popular apps, who have been trialling Freeway for gratas, including the world's largest gaming content developers. The trials are concluding presently in India, Malaysia and Indonesia, where Freeway's review and download scores are very commendable. These trials did not present revenue for SYT, but establishing themselves with these developers in these geographies is more important than quick returns. A similiar roll-out is underway in Mexico.
Freeway is bringing content to users where data is relatively expensive. This is the essence of Freeway's raison d'être. Developing nations have very expensive pre-pay data models that are unrealistic in the new world of booming content, and if content providers want customers, their method of acquisition needs to change. Sponsored data hold the potential to become the norm of data delivery in certain, if not all geographies.
If revenue and profits are the key to a successful technology stock, then look for the bottom line on the forthcoming Q. The last was a meagre $281k, but that was up from only $17k in December, a 1500% increase, and most of that was apparently only from a few weeks of revenue. Having a similiar increase would be superb, but anywhere between 500k and 3M is likely.
I'm jumping the gun here by forecasting the future without laying out properly the all the reasons why, but bedtime is beckoning, so I'll call it a night.
One last thing. Syntonic's OTT system, Overdrive, was launched less than 2 weeks ago, but only on the Google Play Store. The Apple release will occur later this month, and the first major advertising will commence in early August. They recently employed a new company secretary, a whole company in fact, a sign of things to come.
