A mobile technology company saw its stock rising in price by up to 90 per cent after announcing a major deal.
Synchronica shares soar 90 per cent
A mobile technology company provided a rare bright spot on the markets yesterday, with its stock rising in price by up to 90 per cent after announcing a major deal. Synchronica, a UK-listed company which builds technology that can turn almost any mobile phone into a BlackBerry-style mobile email device, signed an agreement yesterday with one of the world's largest mobile network operators. The company's potential for rapid growth was outlined last month in The National after an interview with Carsten Brinkschulte, its chief executive, who was visiting the UAE.
Synchronica did not disclose the name of the operator it has signed with, saying only that it is among the 10 largest in the world, reaching more than 100 million customers in Europe and Asia. As part of the agreement, Synchronica will be paid a ?1 (Dh4.76) activation fee for every mobile customer that uses the service, plus yearly subscription and support fees of up to ?3.60 per user. It will also sell professional services to the network operator, aiding the company in the integration and customisation of the technology.
While shares in the world's major mobile operators and technology companies have slumped in the past six months, Synchronica's stock, traded on London's Alternative Investment Market (AIM) rose sharply following the company's announcement. Mr Brinkschulte believes that the appeal of mobile email goes far beyond the owners of expensive devices like the BlackBerry and Apple's iPhone. Synchronica's system, which uses a number of patented technologies, can use the functionalities of low-end devices, such as text messaging and basic mobile data browsing, to let any mobile phone instantly send and deliver email.
The capability to bring an upmarket service to basic devices will be most lucrative in emerging markets, Mr Brinkschulte said. Middle Eastern operators such as Etisalat, Kuwait's Zain and Saudi Telecom, which are all expanding their networks into Africa and Asia, are prime targets for Synchronica's products. Mr Brinkschulte said the company was in discussions with a number of regional network operators, and hoped to announce at least one high-profile deal here next year.
One of Synchronica's largest investors is Saudi Arabia's Prince Hussam bin Saud bin Abdulaziz Al Saud, who acquired a 10 per cent stake in the company in February. A son of the late King Saud, Prince Hussam is the chairman of the Saudi Arabian affiliate of Zain. The company is now valued at £14 million, a figure that could increase substantially if it signs further contracts with network operators and handset markets. Nokia and Motorola, two of the world's largest mobile manufacturers, each paid in excess of US$400 million to acquire specialist mobile email companies in recent years.