Syntonic is trying to disrupt mobile data with sponsored app bundles
Link copied to
Mobile data hogs rejoice.
ASX-listed software developer Syntonic has launched a service that provides unlimited data for mobile streaming junkies — but only for the apps they use most.
Back in the dot com days free Internet Service Providers briefly existed as a way consumers could get free online access to certain sponsored websites.
Syntonic’s “Freeway Overpass” service is a modern-day version of that strategy, offering unlimited, data-free access to certain apps either for free on sponsored packages or for inexpensive subscriptions.
Syntonic (ASX:SYT) shares jumped 20 per cent after the announcement, closing at 3.1c on Friday.
Chief executive Gary Greenbaum told Stockhead the data plan market was in need of a shake up.
“There is a real mismatch between what consumers are buying and what they value. When they sign up for a mobile plan it is not data but apps and content that they want,” he said.
“This is the beginning of a new model for monetising mobile internet. It provides great value to the end-user and generates new revenue streams for the carrier.
“At the end of the day content is king — and that is what customers want to pay for.”
Initially available only in the US, customers can purchase various bundles starting at 99c a day for basics such as Facebook, Instagram and Spotify — or a full suite of music streaming apps for $1.99 a week. Customers of telcos such as AT&T and Verizon can get data-free access to certain apps through sponsorship deals.
“For the most part our target is 18 to 34-year-old millennials on limited data plans but frankly it extends to anyone that does encounter the pay wall,” Mr Greenbaum said.
“We have the ability to tailor packages for niche markets such as a backseat bundle to entertain the kids in the car.”
The company hoped to bring in new customers for service providers who are seeing average revenue per user decline for the first time, off the back of expensive investments in high-speed 5G mobile network technology.
The next-generation 5G technology, which promises mobile speeds 50 times faster than today’s 4G speeds, is expected to drive much heavier mobile use of streaming music and video services.
North America is leading the 5G charge according to the Global System for Mobile Communications Association.
Almost half of all Americans will be on the quicker 5G network by 2025. (It’s expected to roll out in Australia from 2020.)
Wireless users are expected to consume more than 6 gigabytes of data per month by the end of 2017, up from an average of 4 gigabytes just last year, according to researcher Chetan Sharma Consulting.
Syntonic reported a loss of $25 million last year, mostly attributable to the company’s acquisition of Syntonic Wireless. It made $750,000 in sales and had $4.9 million in the bank at the end of June.
Syntonic has a market cap of $61 million. Its shares have traded between 2.4 and 5.9 cents in the past year.