Transcript
Transcript:
James West: I’m joined now by Marc
Seelenfreund; he is the CEO of Siyata Mobile, trading on the TSX Venture
under the symbol SIM. Marc, welcome back. It’s been five years since we had
this conversation.
Marc Seelenfreund: Thank you very much. Nice
to be here.
James West: Yeah. Okay, Marc, so give
us an update: What has happened over the last little while for Siyata Mobile?
You seem to be making some great progress.
Marc Seelenfreund: So we’ve been working with
a Tier One US carrier to launch our key product, which is the UV350. That is
the first smart phone that was made specifically for commercial vehicles.
Just to give you an idea, there are over 13 million commercial vehicles in
North America; those could be buses, trucks, ambulances, police cars, RCMP vehicles.
We’re about to launch in the United States. We launched with Bell about three
months ago. We started sales already in Canada of this product, and we’re
very excited that now we’re going after the largest market in the world,
which is the United States, and we’ll be doing that with AT&T, which is
obviously one of the largest operators in the United States and in the world.
The market opportunity for us there is tremendous, and we think that it’s
going to be a game-changer for the company going forward.
James West: Okay. What is the
difference between a cellular device for a commercial vehicle versus a normal
one?
Marc Seelenfreund: So if you want to use your
iPhone or your Samsung phone in a truck or in a bus or in a police car, first
of all, it’s illegal, but second of all, it won’t work well; the noise
cancellation is an issue, so the person on the far side picks up all the
noise that’s in the background in that truck in that vehicle, and therefore,
regular consumer devices are not appropriate for commercial vehicles. Not to
mention that they’re not legal.
We’ve created a device that replaces land mobile radio, so really what
we’re doing is, we’re not replacing a cellular handset per se; we’re
replacing a land mobile radio, which is used by millions of fleets around the
world.
James West: Okay. So it’s essentially a
cell phone based on two-way radio bandwidth and technology?
Marc Seelenfreund: So it’s a cell phone that
is based on something called Push to Talk Over Cellular.
James West: Oh, okay.
Marc Seelenfreund: Which is the cellular
version of land mobile radio, and that’s really where we see the market
moving. We think that that’s going to be the market going forward. land
mobile radio has been around for about 50 years; the next generation of land
mobile radio is Push to Talk Over Cellular. This is something that all the
major North American cellular operators are very focused on, so whether it’s
Bell, Telus, Verizon, Sprint, AT&T in the United States, and we are the
only device that is made specifically for commercial vehicles. And as I said,
there’s about 13 million commercial vehicles in North America, so there’s a
very large-scale market for us.
James West: Sure. How much of that
market can you capture over time, do you think?
Marc Seelenfreund: We think that we can
certainly sell, you know, hundreds of thousands to millions of devices. One
thing that I didn’t mention is that [inaudible] We think that we can sell
anywhere from hundreds of thousands of devices to millions of devices. The US
government recently set up a network together with an AT&T called
FirstNet, which basically allows first responders to use Push to Talk Over
Cellular using cellular phone technology. We are going to be the first, and
probably the only, device in the near-term that has a specific device for
commercial vehicles. So for the FirstNet network, obviously, so that means
that police cars, ambulances, fire trucks, even yellow school buses, will be
able to use our device. And again, it’s millions of devices that can
potentially go into these types of vehicles in the United States and Canada,
so it’s a very large market.
James West: Right. What have you got to
deal with in terms of competitors who might be targeting the same audience?
Marc Seelenfreund: So we started the company
about seven years ago, and we’ve already sold over a quarter of a million
devices that are 3G devices, cellular devices, for commercial vehicles. We
don’t have any competition; we don’t know of anybody that has made a smart phone
that has Push to Talk Over Cellular capabilities. There’s nobody else out
there that’s doing it at the current time, and we think that we certainly
have a two to three year edge or lead over any competition that would want to
come into this market and do something similar.
James West: So are you expecting to
expand into global markets at some point?
Marc Seelenfreund: We’re going to be very
focused over the next year, certainly, in the United States and Canada, but
we do expect to also go into additional markets. We’re already in trials in
markets in Europe; we plan to also start in South America. But clearly, the
main market for us is going to be in North America.
James West: Okay. And do you
manufacture your devices?
Marc Seelenfreund: We manufacture all of our
devices, correct. We develop the devices, we manufacture them, and then we
sell them to the cellular carriers.
James West: Oh, interesting. And so
what kind of margin business is that?
Marc Seelenfreund: So the margins are very healthy;
I can’t say specifically what the margins are going to be, but it’s clearly
going to be much healthier than the margins that we’ve had until now, and I
think that there’s going to be a dramatic change in the company, both in our
top line numbers and our bottom line numbers simply because we’re going into
much larger markets with a device that’s going to cost, you know, the end
customer around $1,000. The devices that we’re selling until now cost the end
customer around $300, so the ASP is about three times the price of what we
were selling until now, and the gross margins are very healthy.
So we think that for a company like Siyata, which is a small micro cap
company, going into the United States with a large carrier as partners, we
think that it’s going to be very dramatic for the company.
James West: And is this something that
the major carriers would ultimately see as a valuable offering for their
product line?
Marc Seelenfreund: Oh, I can assure you that
the carriers would not be launching our product if they didn’t feel that it
was very valuable for their customers.
James West: Okay.
Marc Seelenfreund: All of these carriers only
range products that they feel they can sell large quantities of the products
and bring value to their customers. So certainly, this is going to be a
valuable product for the carriers.
James West: Interesting. So how much
time and how much more money are you going to need to get to a state of
profitability?
Marc Seelenfreund: We believe that, already
in the coming quarters, we’ll be profitable.
James West: Oh, great.
Marc Seelenfreund: And we think that the
company is going to be a very different company simply because we have much
larger markets that we’re going after, that we didn’t have until now. We’ve
spent about two and a half years working to get approval at AT&T and at
FirstNet; that’s what I was saying. The barrier of entry is extremely,
extremely high, and I think that all of the work that we’ve done until now
will allow us to bear the fruits in the coming years from this product and
from future products that we plan to launch in the coming years.
James West: Okay. So when you say
‘future products’, is there an R&D effort that continuously develops and
rolls out new products?
Marc Seelenfreund: These are technology
products, and there’s always R&D efforts that are ongoing. Of course
we’re going to be launching a 5G product, probably sometime at the end of
next year or in 2021. So that is in the works. We always want to stay ahead
of the market.
Having said that, we believe that the current product, we’ll be able to
run with it for many, many years; three, four, five years at least, similar
to our 3G product which we launched in 2013, and has been working until now.
So we’ve been selling that product for about six years, so it’s not like a
regular handset that you switch every 18 months; these product sit in a truck
and you can sell that type of a product for many years. So we’ll have a 5G
product next year, and we’ll have additional products that are currently in
development, for sure.
James West: Is it conceivable at all
that this will ultimately become a consumer product?
Marc Seelenfreund: We don’t believe so. Our
products are made for commercial vehicles specifically. Everything in our
world is hardwired, so unlike, you know, every consumer likes to have
everything Bluetooth and wireless and whatnot, because these devices are
mission-critical devices, you have to be able to reach a police car. You have
to be able to reach the bus. It has to be connected to the battery; it has to
always be charged. It has to be connected to an external antenna so that you
have better connectivity and better coverage.
Because of that, our devices are very focused on commercial vehicles and
on enterprise customers, and not necessarily on consumer customers.
James West: So I’m just curious, when
you say 5G devices – does that mean that you’ll be competing with the likes
of Huawei and all of those big 5G infrastructure providers?
Marc Seelenfreund: No, definitely not.
James West: Do you need to rely on them
for your devices to work?
Marc Seelenfreund: No, no, no. We work on the
infrastructures that are in place from the cellular carriers. So if Bell has
an infrastructure from Nokia or from Motorola or from any other
infrastructure company, of course we’ll be working with their infrastructure.
We can work with any infrastructure; we’re not dependent on Huawei or any
other Chinese vendor. But our products are, in essence, neutral, and we can
work with AT&T or with any of the US carriers on any infrastructure that
they may be using.
James West: Okay. Finally, what are the
big milestones you hope to hit in the next six, 12, 24 months that are really
going to transform the company?
Marc Seelenfreund: Revenue, revenue, and
profit.
James West: [laughter] That’s a good
answer! That’s a great answer. All right, Marc, we’re going to leave it there
for now. We’ll come back to you in a lot less than we did last time. Thanks
very much for joining me today.
Marc Seelenfreund: Thank you very much, I
appreciate it. Thank you.
