Siyata Mobile nudges closer to multi-billion dollar market with Tier 1 carrier deals
Siyata Mobile Inc. (TSXV: SIM | OTCQX: SYATF) has a clear business proposition. Remove outdated push-to-talk radio devices in commercial vehicles, costing several thousands of dollars, and replace with a single, modern device worth less than $1,000.
The company’s Uniden UV350 device is not an iPhone or a Samsung Galaxy. It combines the specialty functions of existing push-to-talk technology, including echo cancelling technology and sound proofing – critical for the large cabins of trucks and ambulances – with the benefits of a 4G network.
Operators of large commercial fleets are under the gun to make this transition from 2G technology, used in radio, because major carriers are shutting them down. This forces everyone from Teamsters to first responders to switch to 3G and/or 4G networks, according to Daniel Kim, a technology analyst with Paradigm Research.
Siyata Mobile took a major step in July when it announced a second U.S. Tier 1 cellular operator has commenced network certification for its Uniden UV350, a device it says is the first to cater to this market. That market is large for a company the size of Siyata Mobile. If 15m vehicles were to upgrade to 3G/4G at US$400-500/devices, that would represent an addressable market of US$5.5-7.5 billion, according to Paradigm’s Kim. Siyata Mobile is in a similar process of certification with another U.S. Tier 1 operator and a major provider in Canada.
Marc Seelenfreund, President and CEO of Siyata, stated, “Once we launch, then we can start sales. These are distribution channels for us.”
Siyata Mobile plans to sell directly to operators rather than retailers, given their extensive distribution networks, he said. Getting a Tier 1 to certify your device is a major milestone. Carriers only take this measure when they want launch a device and see the potential to sell substantial volumes of the product.
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The commercial vehicle market is niche for the likes of Apple and Google, which are used to selling hundreds of millions of units. Google’s 2010 takeover of Motorola probably took out the most likely contender for this industry segment, allowing Siyata to build the world’s first all-in-one 4G/LTE in vehicle, cellular device.
Today most commercial vehicles have four to ten devices inside the cabin, worth some US$6,000-10,000 in equipment. Having to deal with so many devices makes is cumbersome, expensive and a safety hazard, Seelenfreund says.
According to the United States Department of Transportation, in 2015 there were over 12 million fleet vehicles in the United States of which 2mn were first responders. Other potential clients could include military, taxi firms and even snow ploughs.
Siyata’s equipment also connects to the battery of the vehicle so it’s always powered and provides more accurate GPS readings.
Large Tier 1 carriers, like AT&T, or Verizon are big potential customers as they are currently converting the First Responders in the United States to a smartphone network based on Band 14 from a push-to-talk technology. In 2017, Siyata Mobile posted sales of US$17.7mn, a 44% growth over 2016. That could grow 30-fold with the distribution networks of these Tier 1 companies.
Beacon Securities analyst Gabriel Leung noted in November last year that when Siyata’s 4G/LTE UV350 is ready to go it could be a “considerable driver of revenue and gross margin.”
He added that the company’s current rate of growth could be sustained over the near-to-mid-term as the company continues to execute on its partner strategy, particularly for its new 4G products.”
“The list of first responders is endless. It could be snow ploughs…all of these guys have to use a radio,” Seelenfreund said. “Right now we have zero competition, which is very unique.”
Matt Craze works with New York-based management consultancy 10EQS and is the founder of Spheric Research, a firm dedicated to global seafood industry research. Matt ... <Read more about Matt Craze>