Specialist
Former executive at Syniverse Holdings Inc
Agenda
- Syniverse's operating environment – demand environment for next 12-18 months across CDMA (code division multiple access), GSM (global system for mobile communications), P2P messaging and enterprise messaging
- Twilio (NYSE: TWLO) strategic investment – who benefits more, strategic priorities and outlook for Communication Gateway product
- Implications from rise of RCS (rich communication services) on P2P (person-to-person) messaging business
- Outlook for 2021 and beyond – enterprise growth trajectory, potential wildcards and downside risks
Questions
1.
Could you provide an overview of Syniverse’s operating environment, including some important trends or drivers?
2.
Do you think messaging will face some mean reversion given that customer engagement via mobile is probably unprecedented due to remote working, lockdowns and social distancing? How do you think that trend could affect 2021 demand relative to 2020?
3.
What are your thoughts on the growth profiles of some of the newer areas Syniverse is interested in, such as IPX [IP exchange], message monetisation or IoT?
4.
Which of the more volume-based products are particularly commoditised? You mentioned that you thought Syniverse is pretty well-positioned to sell in the suite. What are some of the cross-sell challenges around maintaining price? Would you expect price degradation?
5.
Which of the API [application programming interface] players that are not pure CPaaS [communications platform-as-a-service] do you think is most formidable? What is that other half of the TAM like?
6.
What do you think drove Twilio’s interest in Syniverse’s model? Who do you think is benefiting and in what ways? There must be benefits for both companies, but should we expect that Twilio will come off better than Syniverse, or vice versa?
7.
Twilio is very much a developer-led sales motion. You mentioned that it’s hard to know where the investments are going, but I would imagine the best place would be towards the sales infrastructure itself in the enterprise messaging tech stack. What are the puts and takes around where the highest ROI would be for putting that strategic investment to work?
8.
Do you think Communication Gateway is purely suited to the large enterprise segment? How would it resonate with mid-market customers?
9.
How would you define a large enterprise by seat numbers?
10.
Given the vast product portfolio Syniverse has a mix of volume-based and recurring revenue. How might that trend in the markets Syniverse competes in? Do you think the company could increasingly focus on recurring revenue?
11.
How do you rate Syniverse’s productivity in being able to sell contracts on a bundle and in being at parity with the industry in contract renewals through having the proper infrastructure in place?
12.
Are there any fresh opportunities for Syniverse that we haven’t discussed? How aligned do you think management’s strategy is with those opportunities? Has the strategy shifted over the last 12-24 months?
13.
What products do you think are least core? I know the LTE product portfolio’s growth has decelerated. We’ve discussed international roaming being a challenging secular spot right now and being high fixed cost. What are key considerations as to what is core to the business?
14.
The T-Mobile renewal had been perceived as a somewhat large risk recently. Do you think there is a longer term risk for some of the larger customers to insource their messaging services? How would that impact Syniverse?
15.
How would you compare tier 2 and 3 operators’ volumes outside of the big carriers in the US vs tier 1 opportunities? Do you think it still represents a meaningful opportunity?
16.
Which start-ups have really been driving carrier adoption of Rich Communication Services? How does that fit in with the Syniverse business? Is it accretive? Does it cannibalise certain aspects on P2P? How could that trend play out over the next 5-10 years?
17.
How do you think Rich Communications Services can be improved? Do you think it is inherently challenged as a value proposition? Will it just be hard-pressed to improve, or are there developments that could drive scale of adoption?
18.
Could you outline the competitor set in the IoT segment? I know it will be players such as Cisco Jasper and that there have been some shortcomings in fulfilling enterprise needs.
19.
You mentioned there’s not any pure play competitor in Syniverse’s portfolio, but can you walk us through who stacks up most properly across Carrier and Enterprise?
20.
How capital-intensive is it to improve traffic pattern optimisation? You mentioned Sinch’s efforts to impact its margins through this method.
21.
There’s stagnant-to-declining growth in the carrier business and double-digit growth in the enterprise segment. At what point do you think enterprise will be able to outpace carrier declines? It’s been tough to grow the top line overall as a portfolio business. How could the Twilio investment accelerate that? How far away is it from being viable?
22.
Does the continued decline in the carrier business take away from Syniverse’s ability to maintain enterprise growth given how cash rich carrier products are?
23.
What are the implications around Syniverse coming in at a premium, even for Communication Gateway? Do you think there will be meaningful margin pressure for the enterprise business across the next few years? Players such as Amazon have extremely low messaging prices.
24.
To what extent do you think enterprise customers are price-sensitive? Is there a material base that you think is price-intolerant?
25.
You mentioned there’s a potential to sustain CAPEX. What does that mean for how CAPEX-intensive the business might be as it continues to scale up its enterprise offering? Do you think there will be significant requirements for enterprise growth, or do you think a lot of that’s in place already?
26.
You mentioned the messaging aspects are very closely tied to the Syniverse network. What does that mean for the degree of tech share? To what extent could optionality exist for the carrier segment?
27.
Is there anything we should be paying attention to which could indicate Syniverse’s direction?
28.
Is there anything you think we didn’t get a chance to discuss?
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