The smartest and most innovative technology companies are taking advantage of the boom in broadband and cellular usage. These companies are creating software, applications and much-improved devices that streamline communication and productivity for efficiency, safety and cost savings. One archaic technology that the automotive world is about to say bye-bye to, is the two-way radio system.
Siyata Mobile Inc. (TSX.V: SIM) is an original equipment manufacturer providing advanced mobile communication devices and infrastructure systems. Their products are used by first responders, taxis, oil and gas, mining, forestry, security companies and pretty much any truck or vehicle that formerly had a two-way radio. Their connected vehicle product lines debuted in 2011 with the world’s first 3G fixed truck phone, and they have now professionally installed over 175,000 phones from multiple product lines, with their most recent device being 4G/LTE ready for the US markets.
Dominating the Field
This dominating developer designs innovative communication systems for professional fleets- Siyata is selling to an expanding market under their Uniden® Cellular brand. Siyata’s mandate is to supply phones and devices for this massive upgrade from aging radio networks and oldschool radio hardware. With Siyata at the wheel, old in-vehicle, multi-device systems are replaced with one single device that incorporates voice, push-to-talk (PTT) over cellular (PoC), data and fleet management solutions.
About 99% of fleet vehicles out there use 90 year old two-way radio technology that is inefficient, cluttered and more expensive than integrating an all-in-one cellular device with a cellular network. And while this is the status quo right now, cellular operators are leaving BILLIONS on the table.
For example, when a truck driver makes a call from outside the truck, the mobile operator (whoever owns the SIM card) gets paid, HOWEVER, when he hops back in his truck and uses his two-way radio, the operator doesn’t get paid because that two-way radio is on a radio network, NOT a cellular network.
This is leaving HUNDREDS OF MILLIONS A MONTH on the table for cellular operators to gobble up from the two-way radio players. But the cellular operator NEEDS a connected-cellular device to replace the two-way radio and capture millions of revenue they currently leave behind.
For an idea of how this might translate down the road to Siyata, Paradigm Capital analyst Daniel Kim spells it out very plainly:
“For example: AT&T has 4M trucks in its network and is keen to upgrade this underpenetrated market. PoC is AT&T’s fastest-growing enterprise application. A small order range from AT&T; for example 30K units would equate to $20M, which is equivalent to our 2017 revenue forecast. This is not built into our forecast. SIM again stands alone and is the first and only company offering this solution for commercial vehicles. The aforementioned FirstNet win for AT&T effectively doubles Siyata’s TAM with AT&T.” Daniel Kim, Paradigm Analyst
Siyata already has carrier relationships with Bell Canada, Telus, Cellcom, Hot Mobile and more. Kodiak, a leading PTT vendor, has carrier relationships with AT&T, Bell Canada KPN, Telefónica, Verizon, and Vodafone. From Sophic Capital’s December Report on Siyata:
“Based on discussions with management, the Kodiak relationship is expected to open several new carriers in the coming year, which should drive sales of hardware for Siyata and software royalties for Kodiak. There is a 3-way interest to see Siyata’s products succeed. Siyata’s products open the commercial vehicle market for both the cellular carriers and for Kodiak, which mainly sell into the handheld market, generating new PoC software license fees for both the carriers and for Kodiak. The mobile operators are interested in selling voice and data services which again will motivate them to adopt Siyata technology… These catalysts lead us to believe that Siyata will be able to penetrate the large-scale Kodiak PoC mobile providers leveraging their unique PoC devices for commercial vehicles.”
“Siyata Mobile aims to take advantage of an opportunity created when Motorola, the market leader in the mobile connected vehicle market, was acquired by Google in 2011. Following the acquisition, Google decided to exit the IDEN (Integrated Digital Enhanced Network) handset market which is now very underserved with an aging population of legacy 2G devices. North American phone carriers are starting to shut down their 2G networks because it’s becoming too expensive to operate them. There is a massive replacement cycle starting to take place in North America as fleet operators seek new and innovative 3G devices.”
Global Leader in Innovative Cellular Communication Systems
Siyata is scaling, bigtime. What started out as a shell only a few years back, has now become a revenue generating machine. Put simply, they solved a whole lot of problems for fleet trucks and enterprises requiring better communication. Their flagship UV350 device is an all-in-one cellular based platform for voice, data management, applications and PTT. Combining a batch of formerly disconnected systems into one device simplifies life and increases productivity and safety as well.
Tier One operators like AT&T, Sprint, Verizon in the States and Telefonica in South America, are now empowered to go after this market, which is why Siyata is concentrating their efforts developing sales channels with operators and dealerships looking to serve this PoC market.
Right now, firemen can’t two-way talk to police who can’t two-way talk to the EMT as the communication systems are not integrated over smaller individual radio frequencies. First responders in the US currently use over 10,000 different networks for voice communications.
In late March, it was announced that AT&T won a “lucrative [$6.5 billion] contract to build and manage a nationwide public safety network for America’s police, firefighters, and emergency medical services.” The government authorized First Responder Network Authority, “FirstNet”, operates as an independent authority within the US Department of Commerce. AT&T has been selected to build the wireless network, with construction slated for later in the year. FirstNet will use Band 14, the spectrum licensed and earmarked as a nationwide public-safety wireless broadband network.
Marc Seelenfreund, CEO of SIM, released this statement March 31, 2017: “FirstNet will completely change the way first responders communicate in the future. This is a large-scale validation that the market is moving away from traditional land mobile radio systems and embracing cellular-based communications with push-to-talk over cellular (PoC) capabilities for enterprises and first responders. Siyata recognized early on this shift in the industry and believe that we are at the forefront of this market with our innovative Band-14-ready PoC-based cellular solutions.”
More about Marc Seelenfreund
Marc Seelenfreund is the Founder and CEO of Siyata, as well as the founder of Accel Telecom, the parent company of Siyata and an Israel based company that specializes in importing and distributing innovative cellular and IP devices to fixed line operators and mobile providers. Prior to Accel, Mr. Seelenfreund was a VP at Sunrise Corporation in New York where he focussed on financing publicly traded technology companies. Mr. Seelenfreund has a law degree from Bar Ilan University, he is on the board of Israel’s leading private university Ono and he has served as an Officer in the Israel Defense Forces.
Big Market Opportunity
Management of Siyata moved early to corner their niche in this market. 15 million commercial vehicles with two-way radios will eventually need push-to-talk compatible devices at $500 a phone. Demand for 5.6 million PoC rugged handsets is estimated by 2019.
There are very few competitors out there offering similar products and no other known company is targeting the in-fleet device market. Multiple cellular operators, over 50 dealers and leading retailers sell Siyata products, with more to come. Distributors and partners include Bell, Telus, Amazon, Best Buy, Cellcom, The Source and the Government of Canada.
The good stuff. The 2016 year end financials, due at the end of this month (April), are set to impress following from a steady stream of purchase orders. This year is certainly ramping up successfully as well. SIM announced on April 6, 2017 that they have posted $4.85-million in revenue for the first quarter of 2017, 80% over the company’s Q1 2016 sales and an 18% increase over Q4 2016. Excellent. This is the third consecutive quarter of record sales, marking an important inflection point that will perk the interest of institutional capital.
Marc Seelenfreund commented: “We continue to see very strong demand for all our product lines and are happy to announce another record quarter. The recently completed $5.1-million financing puts the company in a very strong position to continue our aggressive sales and product launches into North America.”
Siyata announced in Jan that they had booked over $4.1 million in Q4 of 2016, a 52% increase in revenue over Q4 2015. They turned profitable in Q3 of last year, and the markets are happily taking notice of the numbers.
“This repeat order comes from a longstanding cellular operator and continues to show the need to replace outdated communication systems in commercial vehicles with our next generation devices,” states Siyata CEO Marc Seelenfreund. “We believe we are beginning to see an increased urgency in making hardware upgrades as 2G/CDMA networks close, and a paradigm shift to upgrade two-way radio systems with devices capable of Push-to-Talk Over Cellular like ours.”
LG Canada, with $49 billion in revenues annually, ordered cellular booster kits to be installed in service vehicles working in remote locations to increase their cellular coverage. And, an undisclosed operator ordered $1.8 million of product this year as well, their largest order to that date. This is aggressive revenue growth, keep ‘em coming SIM. Siyata is close to gross margins of 30% and EBITDA margins of 10%, with $50 million in annual revenue the goal for 2020 (which last time I did the math is only 3 years from now, what the hell?)
In 2015 there were an estimated 12 million fleet vehicles in the US. Plenty meat on this bone for a $40 million market cap company to attack. They also announced in February a $1.275 million credit facility with a Tier 1 Canadian bank to add more fuel to their rapid growth strategy.
Major shareholders include Accel Telecom (33.3 million shares) and the Shamrock Israel Growth Fund (5.7 million shares).
This company looks to be well-incentivized to take down some warrants along the way to fill the till, including 7.16 million $0.60 warrants that expire this upcoming July 23.
Next up for Siyata?
There is a major paradigm shift going on from two-way radios on outdated and expensive networks, to PTT over cellular networks. Tier 1 operators such as Telus, Bell, AT&T, Sprint, have been leaving so much money, BILLIONS, on the table and that is why the sky is so damn blue for SIM. Without even landing a Tier 1 operator, the last three quarters of revenue suggest a run rate getting very close to $20 million in 2017. They are under-promising and over-delivering, and you’ll be happy to hear that the CEO is on the road every month telling the story. He understands how to keep the capital markets side of the biz ticking along in the right direction.
And while sales for Siyata are mostly coming from Israel, get ready to see a big push in the US market for SIM. They now have $9 mill in working capital, enough to handle $30 million a year in revenue. The US market will be a huge game changer for the company and for investors. The company will embark on growing awareness in the US through investor roadshows and concerted marketing efforts, which gives confidence to retail that this one could have more room for upside at this level.
Siyata’s Product Portfolio
Definitely take the time to check out their website for more product info: www.siyatamobile.com
Flagship Uniden® UV350 is hardwired to the vehicle’s battery, offering clear voice and sound, cellular based Push-to-Talk, extended GPS reception for those venturing off the beaten path, in-vehicle wifi and more. This device reduces the echo and improves sound quality, and it is designed to handle extreme weather.
From March 31, 2017: Siyata announced that the UV350, the world’s first 4G/LTE vehicle-cellular-device is compatible on FirstNet’s Band 14.
Siyata’s TRUCKPHONE is ideal for commercial vehicles and fleets allowing drivers to easily talk and drive. This one launched in February of this year at one of Canada’s leading electronic retailers, Visions Electronics.
VOYAGER is the first integrated and dedicated 3G smartphone for personal and commercial vehicles, vans, trucks and fleets.
The Uniden U620 is their Rugged Phone, a multipurpose cellular phone for mobile industrial users and recreational outdoor consumers who like to jam a cell in their pockets while dirt biking, skiing, hiking and mountain climbing.
The BAGPHONE has a built in signal booster and a waterproof case, perfect for those who work in remote locations and tend to lay a beating to tools of their trade. And yes, it’s much cheaper than a satellite phone.
Their high quality Uniden® cellular boosters have wide retail applications for homes, cabins, and cars. The commercial opportunities for Siyata are mostly in urban areas where indoor cellular service can be obstructed while underground or when large cement and steel structures interfere with the cell phone towers.
“In North America, 80% of cellular calls are made indoors, the area with the lowest probability of cellular coverage, leaving ~75M homes and commercial buildings experiencing dropped calls and slow download speeds.” from Siyata Mobile Receives Purchase Order from LG Canada
Uniden UCP 100 ($400)
Uniden UCP 200 ($600)
Uniden UV 350 ($800)
Rugged Mobile Phones
Uniden U620 ($300)
Cellular Boosters ($400-$1,000)
Siyata’s objective is to be a large-scale profitable global player in innovative mobile products & systems for the enterprise market. All PTT devices will eventually be carrier-integrated on cellular networks and there is a huge opportunity for Siyata Mobile to continue cornering this niche, which is too small for the big operators, but more than big enough for Siyata to keep truckin along. PoC is cheaper and more reliable, and all of the mega operators are vying for more revenue from current customers. Here we say our final farewells to the two-way radio. Nice knowing ya.
To your success!
To download a PDF of this article, click here: Siyata Mobile’s Explosive Growth Story $SIM.V $SIMFF
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Siyata Mobile Inc. is not a client nor an advertiser. One or more of the Stock Syndicate owners does own shares in Siyata Mobile Inc.