Digerati Technologies, Inc. (DTGI) is a publicly traded holding company with a long track record of successfully launching and managing various subsidiary operations. Digerati is also a multi-year recipient of Deloitte’s Fast500 and Fast50 Awards, for recognition as one of the fastest growing technology companies in North America. DTGI, through its Texas subsidiary, Synergy Telecom, provides Internet-based telephony services or UCaaS (Unified Communications as a Service) to its target market of the Small-to-Medium-Sized-Businesses ("SMB"), of which there are 27 million SMBs in the U.S.
DTGI has been in the news recently for the acquisition of Florida-based T3 Communications, Inc., a leading provider of cloud communications and broadband solutions. With this acquisition, Digerati has positioned itself for hyper growth in both UCaaS and SD-WAN (Software-Defined Wide-Area Network), two of the fastest growing sectors of the telecommunications industry.
T3 Communications is based in Fort Myers and locally provides high quality communication services in Southwest part of the State. T3 maintains cutting-edge technology to support its robust solutions, enabling it to exceed the needs of its customers to communicate globally, with a 99% customer satisfaction rating.
The T3 acquisition brings together two emerging cloud communication providers (T3 and Synergy), which can provide a broad range of customers with high quality telecom services. Customers currently come from various industries like banking, healthcare, financial services, automotive, legal, real estate, staffing, government and more. The combination of T3 and Synergy serve nearly 10,000 business users in Texas and Florida, and generate over $6 million in profitable annual revenues. The combination also includes other cost synergies such as integration of two cloud PBX platforms, and two back-office systems to bring more profits to the bottom line.
More and more small businesses are migrating from traditional phone systems to cloud based telephony because of, among other things, lower costs, and portability. The T3 acquisition will help Digerati accelerate its growth plan in the key area of UCaaS solutions, but also in the provision of SD-WAN. Approximately 20 million SMBs, or 75% of the total, are still using traditional telephone systems, presenting a huge growth area for Digerati and its wholly-owned subsidiaries. Due not only to its convenience, but also an FCC mandate that requires businesses to migrate from the outdated copper wire systems, SMBs will be forced to migrate to VoIP or UCaaS. Digerati and its subsidiaries' expertise lies in helping customers pay for only their used capacity, meaning they do not need to spend on costly infrastructure, diminishing capital spending. Digerati plans to deliver UCaaS solutions domestically in the U.S. for now, as the market is estimated to be $26 Billion for services alone. The global market is estimated to be valued at $96 billion by 2023, which Digerati can provide services into due to its global carrier-grade platform and network.
As previously mentioned, the other service offering coming via the acquisition of T3 is SD-WAN, which is a software approach to managing wide-area networks for businesses. This allows for ease of development, central manageability, reduced costs, and can improve connectivity to remote or branch locations, as well as allow for flexibility and security. The SD-WAN market is small but growing, pegged at only 5% today, it is predicted to climb to 25% of enterprise users in 2 years. Revenue from SD-WAN service providers is growing at 69.6% annually and it is estimated to reach $8.05 billion worldwide by the year 2021.
Arthur L. Smith, CEO of Digerati, commented, "The acquisition of T3 Communications has created a solid foundation for our continued roll-up of other profitable cloud communication providers that have excelled at that ‘local touch’ and displaced the national and incumbent providers who are not adequately serving the small-to-medium-sized-business. T3 aligned perfectly with our strategic plan, our technology, and our acquisition criteria. We look forward to expanding in the Florida market with a respected brand and quality team of committed employees who make customer support a priority.”
Josh Reel, CEO of T3, stated, “It is exciting to be a part of a plan that places high value on customer service and retention. Although we are eager to meet some lofty expectations for driving shareholder value on Wall Street, fundamentally, it comes down to a very basic value proposition on main street, serving our customers better than our larger competitors. We believe that executing on this basic principle and acquiring other profitable operators, who are also delivering on this same principle, will generate a great deal of value for all stakeholders.”
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