Syntonic makes headway in Asian emerging markets with Nazara deal

Syntonic ASX SYT Nazara Technologies mobile games
Mobile games by Nazara Technologies.

Mobile platform and services provider Syntonic (ASX: SYT) has signed a three-year partnership agreement with Nazara Technologies.

Nazara is an emerging games developer in emerging markets such as India, Middle East, Africa, South East Asia and Latin America with operations in 61 countries, sports more than 4 million paying users racking up over 37 million downloads in total.

Taking direct aim at the burgeoning market in Asia and the Middle-East, Syntonic and Nazara have agreed to trial launch Nazara’s games club subscription to be made available “data-free” on Syntonic’s Freeway platform.

The duo has agreed to cut the ribbon on the service in Oman to subscribers of Ooredoo, a leading communications company with 164 million customers and operations in Qatar, Kuwait, Oman, Algeria, Tunisia, Iraq, Palestine, the Maldives, Myanmar and Indonesia.

During the trial period, both parties agree to bear their respective costs and to negotiate a long-term revenue-sharing relationship for a phase 2 commercial launch that will extend the service to additional Nazara Game Club products and geographies outside of Oman.

The companies are expected to gauge the success of the trial in real-time over the coming months as they formulate a more substantial and longer-term deal, probably dependent on the reception Syntonic’s Freeway platform receives over the coming 3 years.

“We are pleased to partner with Nazara to deploy Nazara Games Club, data-free to Ooredoo subscribers. This agreement highlights the growing carrier and content provider interest in Freeway services. The company recognizes the opportunity for multi-faceted growth in this partnership to drive engagement with the Freeway platform, initially in Oman, and then intends to expand across all of Nazara and Ooredoo’s global markets,” said Mr Gary Greenbaum, CEO and managing director of Syntonic.

Growth in performance and deal-making

Earlier this year in February, Syntonic announced an expansion to its long-standing deal with Tata Communications and reported that it had beaten analyst expectations by recording a 43% increase in quarter-on-quarter profit and hailed its impressive 2,450% year-on-year increase in quarterly cash receipts.

In the first half of this financial year, Syntonic says it recorded a 502% increase in revenues which it hopes to escalate even further courtesy of agreements with the likes of Nazara and Tata.

Freeway represents Syntonic’s retail-focused product working alongside DataFlex, a split billing solution that works across multiple telecommunications providers. The service recently received a significant boost with a deal in Turkey.

Syntonic also reports that Freeway’s global installed base grew month-on-month by 7.7% in March 2018 to 31.7 million smartphones, with the majority of growth driven by the Freeway “SDK preinstall on two new Android models”. For the quarter ending 31 March 2018, the quarter-on-quarter installed base grew by 25.2%.

At the present time, Syntonic is focusing on five territories where it thinks there is best opportunity to extend its already strong growth rate: China, Vietnam, Turkey, sub-Saharan Africa and Mexico.

As a validator of its innovations, the company won Best Mobile App Gold Award and the Mobile Star Award for the best mobile app last year.

Filip has written in both Australia and abroad covering the global economy, geopolitical issues, commodities and small cap stocks on the ASX. He also has many years experience as a share market trader.