$7M Cap Raise reduction
Reduced due to:
• Anticipated revenue from Tata which has been amplified by the new (recently announced) 50% arrangement
• Ready to move forward in SEA where there is a “hunger for sponsored data” – “sold out immediately” (achievement of early successes)
• Saw what was coming through a rich pipeline
The company has revenue to grow:
• Accruing revenue to grow over coming quarters
• Belief that the Milestones are achievable
• Short/medium term – no extra investment is being sought despite investors coming forward to offer extra investment.
• Confidence in the revenue being received and the pipeline
No Revenue Reported to Shareholders
• Syntonic cash flow numbers will be included in next 4C in accordance with ASX requirements. (NB date company became SYT was after close of last quarter)
No Revenue Projections being promulgated currently
• Opportunities are huge and the ranges of potential outcomes are large (impression only…..directors don’t want to be inaccurate by giving predictions)
• Half year and full year all will provide detailed information on revenue stream
Tata – Deal announced on 1/8/2016 (50% share)
• Original deal - Annual Subscription to be paid by Tata
• New deal – Tata wanted to lock in long term with Syntonic (http://www.asx.com.au/asxpdf/20160801/pdf/43903qlc8x4xm2.pdf)
• Tata bears all operating costs – for SYT the revenue share is high with costs very low
• Freeway by Syntonic – can also be supported separately on TATA network – when/if this is the case, Syntonic don’t have to share revenue with TATA
Download numbers on Google Play Store
• Downloads do not take into account the white label downloads
Pokemon Go
• Original campaign 10000 for 1GB was to finish on 15 Aug
• Almost sold out completely (in Gary’s words….”Throttled this”)
• Currently in business discussions to extend the offer in US/Malaysia/Indonesia
• High bandwidth, augmented reality games – this is just the start
• The promotion has been very successful from a strategic perspective in getting the Syntonic name out
Carriers looking to differentiate themselves from other telcos
• A lot of interest in video from carriers (Freeway)
Scalability & Reliability of Freeway
• Freeway platform was thoroughly tested by Tata prior to the Tata deal being endorsed
• Syntonic has a Global Development & Customer Relationship team ready to support/promote the product and address any concerns (which were indicated as usual in the initial roll out stages)
• Platform stable and management seemed confident in its deployment
Addressable Audience
• Users who have a smartphone and the ability to access Freeway on their carrier’s network
Will Syntonic go direct to market or use resellers?
There are 2 versions:
• Enterprise version
• more $, better security, greater analytics available for companies
• promoted through Enterprise mobility management vendors who just bundle in Syntonic with other programmes (??? Samsung Knox ???)
• For small/medium organisations there is a SAAS system/portal that they can go through directly
Dataflex
• 10 pilots – no revenue yet – but a huge learning and promotion opportunity from these pilots
• Big commercial push starting end of this year
• In Dataflex, the employer is the sponsor of the data, hence Freeway and Dataflex are similar in the sense that:
• In Freeway companies/organisations/app developers sponsor data for a person’s leisure time (e.g. games/Expedia)
• In Dataflex an employer sponsors data for a person’s work time (e.g. Apps/VOIP/Skype etc)
Freeway
• Only app of its kind (front/back end)
• Competition seemed to pale into insignificance from the list of reasons (e.g. some required code to be altered, others didn’t have analytics etc. etc. etc.) Worth a listen for technical people but seemed like both Gary and Rahul were very confident in their product
What will the next 3 months bring?
• A lot more countries opening up - Philippines, Thailand + Tata in SEA
• Anticipate more augmented reality in USA
Aussie Office?
• Perth interim office – currently evaluating different offers from various states to establish a more permanent office
Could Syntonic consolidate with another business?
• Yes
Market Cap Justification (3c @ $60 Mill)
• As large shareholders, Gary and Rahul want a strong share price.
• When asked about the share price on the decline….stated that there is significant news flow coming
• Gary went on to discuss his time at Microsoft when the chairman (?) was asked “How to boost the share price?” his answer was simply “Do the right thing for the business and the market will respond.”
In my opinion Gary will do the right thing for the market! Having been fortunate enough to have met spoken with him at length at the ASX Techno Conference earlier in the year, I know that he is aware of (and takes seriously) his responsibility to his new shareholders.
Chad's wife
SYT Price at posting:
2.8¢ Sentiment: Buy Disclosure: Held
