It looks like
Verizon (NYSE:VZ) is picking up AT&T’s (NYSE:T) fumble of the Elephant Talk
Communications (NYSE MKT: ETAK) ball after AT&T paid out ETAK $13.5 million
to close down its contract with Mexican wireless company Iusacell (now AT&T
Mexico). With software-defined network architecture and cybersecurity solutions
provider ETAK now in the running to be the vendor for Verizon Partner
Solutions, it’s clear that ETAK hasn’t missed a beat. A new Master Service
Agreement with Verizon could be right around the corner for the company and the
increasingly competitive nature of the telecom sector is brilliantly
illustrated by Verizon scalping AT&T here, investing in a distributed
architecture solution that can seamlessly provide users with bleeding-edge content
delivery solutions.
The formation
by ETAK of a special committee to explore JV, merger and strategic disposition
alterations of its wholly-owned transaction cybersecurity solutions subsidiary,
ValidSoft, speaks volumes here. Also, the news that ValidSoft has already
quickly gone live with two UK banks, leveraging a device trust partnership with
renowned consumer credit risk and analytics software company Fair Isaac
Corporation (NYSE: FICO) to deploy a solution using ValidSoft’s International
Proximity Correlation capability, shows how attractive the company’s position
is.
Application of
the $13.5 million picked up on the Iusacell split has helped ETAK trim the fat
too, allowing the company to eliminate debt overhang and giving it the
procedural leeway to pull the trigger on corporate restructuring efforts that
should reduce G&A costs by $5 million within this year alone. The share
price has been climbing steadily since early this month and Friday’s spike to
$0.63, a 75 percent jump, underscores the 50 percent gain since the start of
the month so far. This is a fierce counter to the undervalued price point most
analysts say the shares have seen since February. Notably, research firm Zacks
just rated ETAK a short term strong buy and the company is making all the right
moves to impress investors.
In fact, one
big part of the company’s decision to get more aggressive with ValidSoft has
been how poorly management believes the company’s share price accurately
reflects the intrinsic value of the company and its ability to generate
revenues on the strength of its mobile enabling solutions alone. Indeed, the
global cybersecurity space was recently projected by Cybersecurity Ventures (Q3
2015) as being on track to grow by over 120 percent in the next five years, hitting
upwards of $170 billion by 2020. This is a big opportunity for an innovator
like ValidSoft and it stands to reason that ETAK’s tight synergy between the
mobile virtual network enabler (MVNE) and cybersecurity sides of its business
will continue to give the company a decisive edge in the space.
The real
success with ValidSoft of course comes from the ingenious balance struck
between security and user experience that is achievable through the company’s
voice authentication approach. Using a robust system which allows access,
without the need for cumbersome and hard to remember passwords or hard tokens
of some kind, is the brass ring of user authentication. Voice print capture
keying is only as good as the biometrics engine behind it though and ValidSoft has
gone to great lengths to ensure maximum security with the added benefits of a
feature-rich environment, with the company’s solution allowing for
configurability options like text-independent authentication, or the recital of
a prompted phrase. Elephant Talk has been vital to ValidSoft’s ability to
deliver its security software solutions via a true carrier-grade
telecommunications platform, enabling ValidSoft the power to process
transactions in real-time, and since its acquisition in 2010 by ETAK, the company’s
MVNE and transaction cybersecurity units have rally gelled.
Take a look at
the ongoing expansion of the mobile space, well-tracked by MobiLens® and Mobile
Metrix® developer, comScore, Inc. (NASDAQ: SCOR), which recently indicated that
the U.S. mobile market was at 76.6 penetration, as 186 million plus Americans
now own smartphones. As subscriber bases swell to new heights, an MVNE like
ETAK, with its ET Software DNA® 2.0 Platform, will continue to be a backbone
solution for MVNO and mobile network operator (MNO) customers, who can
experience as much as a 90 percent reduction in outlays while gaining the
capacity to serve end users with a full set of mobile voice, SMS, and data
services.
Mobile wallets
are another key, fast-growing target in this area. With a report out in March
from TechNavio forecasting a 36.8 percent CAGR through 2019, powered by the
rapid proliferation of near-field communications (NFC) hardware and intense
goading on by sector juggernauts like Amazon.com (NASDAQ:AMZN), Apple (NASDAQ:
AAPL), Google (NASDAQ: GOOG), and PayPal (NASDAQ: PYPL), mobile wallets are
shaping up to be a defining driver of the success of an outfit like ETAK. You
wouldn’t be wrong to suggest even that a kind of war is being waged between the
biggest sector players, with the victor(s) deciding who will dominate this
yet-emergent space. One thing is certain about how all of this will shake out
at any rate: m-commerce is and will continue to represent a retail sea change.
Allied Market Research’s projection of a $5.25 trillion global market for
so-called ewallets, released back in late 2013, has now effectively ceased to
shock savvy investors.
Consumers have
been flocking to the amenities m-commerce has to offer, and everyone from
brands to retailers on the sell side are already banking on the very bright
future that the associated gold mine of big data from consumers will provide.
Gathering the kind rigorous, actionable consumer intelligence that m-commerce
solutions can now ubiquitously provide, while so substantially improving the
user experience at the same time, was a reality merely dreamt of by brands and
retailers only a decade ago.
The recent news
out that EUTV® Brazil (Surf Telecom®) has tapped ETAK to handle the core
virtualized software services platform implementation is another clear
indicator of the company’s overall health. The company’s platform is the key
element needed to fully realize Surf Telecom’s vision of capturing a huge chunk
of the 280 million strong mobile subscriber base in Brazil, now that Surf
Telecom has been officially granted a Tier 1 license by Brazilian National
Telecommunications Agency, Anatel. ETAK will enable Surf Telecom to bring
mobile services to a massive user base, as well as provide Surf Telecom with
the capacity to offer MVNE and mobile virtual network aggregator (MVNA)
capabilities to Brazilian MVNOs. This is bread and butter for ETAK’s ET
Software DNA 2.0 Platform and will allow Surf Telecom to deliver a broad
spectrum of powerful 4G solutions to the market at noticeably more competitive
prices. This arrangement reflects Anatel’s commitment to stimulating healthy
market forces, as well as the cost-effectiveness of ETAK’s comprehensive
platform.
The ET Software
DNA 2.0 Platform also greatly simplifies overall administrative requirements,
with its highly intuitive and easy to use interface. The platform uses
networked-embedded technology as well, which enhances internal systemic
redundancy, resulting in an architecture that is substantially more robust,
offers tighter security and usage efficiencies, and which simultaneously
promotes the DNA 2.0 Platform’s inherent modularity and scalability. The fact
that it’s cheaper to deploy and easier to manage spells music to the ears of
MVNOs, and ETAK’s technology will allow Surf Telecom to bring forward some
truly cutting edge MVNA/MVNE strategies, tailored specifically to the Brazilian
MVNO market.
MVNOs have to
move or die and are thus constantly looking to expand services provided while
improving their existing offerings. The ability to use a single, highly modular
telecom solution like the one provided by ETAK allows MVNOs to capture new
revenue streams without the typically associated overhead risk.
Learn more
about Elephant Talk by visiting the company’s website at www.elephanttalk.com
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