A major acquisition, contracts worldwide and authoritative words on mobile email. A busy summer for Carsten Brinkschulte, CEO of Synchronica. Michael Schwartz caught up with him.
Forecasts point to emerging markets as a breakthrough area for mass market mobile email. Nigeria, for example, saw a 38% year-on-year growth in new mobile subscribers to 30 million during 2006. Informa in turn is predicting that there will be 4.81 billion mobile phone subscribers by 2012, with the next billion subscribers coming from emerging regions such as Africa. PC and fixed-line penetration are both low in Africa and consumers rely on their mobile phones for communication - exactly the sort of market on which mobile email will thrive.
Mobile Gateway (Synchronica's mass-market push-email infrastructure software) delivers push email and synchronisation services for calendar and contact data, targeting consumer and business users with built-in connectors to mass market mailboxes such as Gmail or Yahoo, as well as Microsoft Exchange or Lotus Domino accounts for business users. The core aim of Mobile Gateway 3.5 is for even the most basic phones to receive email via an email-to-SMS gateway.
Mobile Gateway is even being promoted as a system that does not require a PC: people can sign up for the service from their handset via WAP, removing the need to sign up via a PC, another benefit for subscribers in emerging markets where PC penetration is low.
The role of Synchronica in mobile email
Carsten Brinkschulte, CEO of Synchronica, has a clear vision for his company, which supplies solutions to the many challenges arising from the mobile email and synchronisation sector. He is clearly a believer in the potential of mobile email, a point proven earlier this year when he addressed TM Forum - Management World Africa in Johannesberg: "Africa is at a metaphorical crossroads: mobile operators in the region now have the unique opportunity to establish the mobile phone as the primary device for accessing the internet but many are unsure about which applications to focus on. Forward-looking operators have identified mobile email as a key differentiator and, more importantly, as a way to reduce churn while also increasing ARPU. Mobile email is a valuable and addictive service with mass market appeal that can be offered on a subscription basis - or even as a free service funded with inline advertising."
Stressing that Synchronica was striving towards a mobile email device which could be used by all mobile users - and not just those with the resources at the top end of the market - Carsten Brinkschulte continues: "Our solution offers mobile operators a low-risk yet lucrative path: Our zero footprint technology works with the majority of phones in the market today, with smartphones as well as with mass market feature phones. Unlike other solutions, Mobile Gateway uses industry standards Push IMAP and SyncML and does not require additional software to be installed on the device. This makes it ideal for Africa where the addressable market is dominated by low-end devices. With Mobile Gateway, operators can finally offer their subscribers a 'BlackBerry for the masses'."
Africa a major factor in Synchronica strategy...
A key part of Synchronica's strategy is to offer Mobile Gateway to major mobile operators in Africa wishing to provide affordable services of the kind associated with BlackBerry. The company's software has already been licensed to two major African operators, and uses the same industry standards for push email and synchronisation that work with more than 1.5 billion phones in use around the world today. This is designed by Synchronica to make it suitable for consumers and prosumers, as well as small businesses in Africa where basic handsets are the norm and where mobile email solves the inherent problems caused by low fixed-line and PC penetration.
Currently, Synchronica is in trials with further three operators following the take-up of licences by two mobile operators in Africa. And yet, despite these recent successes, Carsten Brinkschulte comments: "We do not target specific African markets; our interest is general. I would mention Nigeria because it is fast-growing and more advanced than most. More recently we have been involved with the Sudan."
Lindsey McDonald, ICT Analyst at Frost & Sullivan Africa, lends her support: "There's definitely a lot of interest in mobile email from companies and prosumers, and a service like Synchronica's that does not require people to go out and buy expensive mobile phones makes a lot of sense."
...and so are Central and Eastern Europe
Synchronica continues to find success in the developing markets of Eastern and Central Europe. For example, it recently received an order for US$730,000 from MTS, Russia's largest mobile operator; the contract was won as a customer through the all-share purchase of Axis Mobile Ltd. The purchase order is for an initial expansion phase (mobile email in Moscow) and is expected to be followed by a further, larger expansion order for a second phase (roll-out across Russia and the CIS). All MTS subscribers, in total 84 million, will have access to mobile email.
Under the terms of the contract with MTS, Synchronica will provide software upgrades and customisation of SimpleMail, a mobile email solution acquired with the recent purchase of Axis Mobile Ltd. Carsten Brinkschulte confirms the important role the purchase of Axis Mobile plays in his strategy, saying of the MTS contract: "This is an immediate endorsement of our acquisition strategy. Last year we identified the market potential of Russia, the CIS and Eastern Europe, where we see the next phase of growth for mobile email. The acquisition of Axis Mobile Ltd, which complements our own product and our customer base within the Middle East and Asia, was the natural result of this thinking. We are very excited to see commercial growth with the largest operator in the area."
He also confirmed to Developing Telecoms the importance of Central and Eastern Europe to Synchronica: "It is not just Russia as we are involved with the Czech Republic and Hungary."
Synchronica in the market-place
Synchronica, which has a market capitaiisation of around US$25 million, is a confident company. At a recent press conference it saw its future position as broadly-based, mainly because it sees itself as an enabler of mass-market mobile email. At present, in its opinion, mobile email is too oriented towards the business community and towards wealthier personal users. The consequence of opening up the mobile email market will result in the "fastest adoption rate expected in emerging markets."
The press conference confirms just how important the acquisition of AxisMobile has been to Synchronica. The former's "complementary technology further improves competitive position...integrating AxisMobile's technology will accelerate Synchronica's development roadmap.
One key factor from the acquisition is the transcoding engine which now makes attachments readable on mass-market devices. In addition, email to SMS/MMS expands push email to the most basic handsets, while the mobile signup facility enables users to register from their own devices.
Brinkschulte concludes: "Our end-users are not confined to the wealthy business end of the market. We enable mobile emails in both the basic and emerging markets. Our competitors are geared to this higher end of the market. We do not neglect the lower end of the spectrum. We won't displace Blackberry. We complement the market at the lower end. We enable Blackberry type devices."
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