TBO.com - TBO is Tampa Bay Online

Syniverse's Niche Keeps Your Cell Texting, Roaming

ADVERTISEMENT

By RICHARD MULLINS

The Tampa Tribune

Published: June 17, 2008

TAMPA - You may not know a Tampa company called Syniverse. But if you have a cell phone, you should give it a nod of thanks when your calls go through.

Working behind the scenes, it makes billions of phone calls around the world work smoothly and has found itself in one of the most lucrative crossroads in the wireless market.

"Whenever I see kids at the mall texting, it makes me happy," said Tony G. Holcombe, president and chief executive of Syniverse Holdings Inc.

Here's why.

Every time someone sends a text message, there's a good chance that a fraction of a penny goes to Syniverse. It's a stream of revenue that adds up quickly when hundreds of millions of people are involved.

Syniverse also runs a massive billing system that lets your cell phone roam from carrier to carrier, so if you're an Alltel customer in Portland or Portugal, it will still be able to call home to Tampa.

A Startling Message

The real jumpstart at Syniverse came this spring.

Managers met at the company's placid headquarters in Highwoods Preserve in North Tampa and added up a startling series of numbers. Revenue was jumping well beyond what the company had told Wall Street analysts to expect.

"We started to see these incredible numbers and found out, 'Oh, my God, this is coming from new devices,'" Holcombe said. All those advertisements pushing smart phones for teenagers and other decidedly nonbusiness customers must be working, and those new customers were firing up their smart phones to surf the Net and send multimedia messages.

Syniverse, which uses the brand name Syniverse Technologies, posted revenue of $115.6 million for the first quarter, up 37 percent compared with the year before, and profit was $15.4 million, up 101 percent.

Then Syniverse raised its forecast for full-year revenue 5 percent, to between $455 million and $465 million. Stock in the company jumped 27 percent that day to $21.09, the most in its history as a public company. It has since pulled back somewhat amid a broad stock market slump.

Much of the new profit came from a relatively new line of business - handling the text, picture and data messages between carriers. For instance, if an Alltel customer sends a short text message to a friend with a Verizon phone, the messages often goes through Syniverse.

That's a good line of work to be in lately. Monthly messages between phones in the United States hit 48 billion as of December, up from 9.8 billion two years before. With more people buying smart phones such as BlackBerries, more customers are making messaging and Web surfing a part of their lives.

Syniverse doesn't disclose exact figures, but in some cases it can take up to a penny from each message sent through its networks.

"There's just been this explosion in data traffic and an expectation from people that they'll be able to send and receive it wherever they are," Holcombe said.

The next round of growth should come from abroad, Holcombe said, as there are more than 600 cellular carriers worldwide that need services to make roaming and messaging happen. For that reason, Syniverse has started acquiring potential rivals abroad, including major parts of the British-based clearing and roaming company BSG Wireless.
Holcombe also has revamped the company's executive suite in the past two years, hiring or promoting 11 new vice presidents, including people for technology, human resources, finance, mergers, communications product management and customer support.

Syniverse employs about 1,100 people worldwide, including about 650 administrative and technical systems jobs in the Tampa Bay area. That job level likely won't grow dramatically in Tampa, he said. But the company's average pay is about $60,000 to $70,000, Holcombe said, meaning the company is providing relatively high-wage positions compared with other companies in Florida.

Challengers On Horizon

All the growth doesn't mean Syniverse has a free ride, however.

Several other major technology companies are working to expand into the market, including Mountain View, Calif.-based VeriSign Inc. and Luxembourg-based MACH, which are strong in messaging and roaming.

VeriSign and MACH have opened or expanded their offices in the Tampa Bay area and have hired former Syniverse executives, a not-so-subtle sign of head-to-head competition.

"VeriSign provides almost all the same services as Syniverse, and we really match up well," said Pete Tracanna, a former Syniverse executive who is director of wireless clearing and roaming at VeriSign.

One of the biggest risks to Syniverse comes from its customers merging.

For instance, Verizon Wireless last week announced a deal to acquire Alltel. On its face, that means a loss of work for Syniverse because the two companies would no longer need to handle roaming issues because customers on both networks would be within one merged corporation.

"We think the management has done a very good job," said John Bright, an analyst with Nashville-based investment company Avondale Partners. "But the biggest risk to Syniverse is consolidation in the wireless world, whomever it is. The larger the customer, the more impactful it will be."

Reporter Richard Mullins can be reached at rmullins@tampatrib.com or (813) 259-7919.

Share this:

Loading Comments...

Email Print

ADVERTISEMENT