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Investor Connect Interview with Art Smith DTGI Chief
CEO of Digerati Technologies, Inc. $DTGI (OTCQB) Art Smith interviewed with Hall Martin, Host of Investor Connect and Founder and CEO of the TEN Capital Network, on Thursday, March 18, 2021. Hall asked Art different questions about the Unified Communications market, DTGI growth strategy, and what indicators investors should look for in undervalued pubcos.
DTGI Chief mentioned there is much opportunity for growth and investment gains in unified communications. There are many telecom and communications providers nationally but do your homework to find the undervalued ones taking advantage of current market conditions. Larger national players have left behind small to medium-sized businesses. SMB’s with 10-100 employees do not have an army of IT people, so they tend to work with smaller operators for communication services. Larger operators like J2 Global ($JCOM), 8×8 Inc.
(EGHT), and Vonage Holdings (VG) focus on fortune 1000 customers leaving the underserved SMB market wide open for companies like $DTGI to serve.
The second indicator Mr. Smith mentioned in the interview is that investors should look for companies like $DTGI that migrate small-medium-sized businesses to cloud-based communications. There is a mega-trend of SMB’s moving from legacy telecom systems to next-gen cloud-based networks of the future. There was a first wave of migrations from legacy infrastructure to VoIP. The second wave was VoIP to Cloud Communications, meaning business applications and programs hosted on external servers. The current third wave of migrations is a team-centric approach to providing services in the cloud. It is all about cloud call center applications or cloud contact centers, the newest catchphrase being Contact Center as a Service (CCaaS).
CCaaS is about helping the SMB to engage with their customers via phone call, social media, mobile apps like What’s App or Telegram, etc., the next-gen cloud-based networks of the future.
The next significant indicator to look for is companies like $DTGI rolling up the fragmented market. The local touch is missing from large communications operators, so many 1,000’s of SMB’s work with regional and local operators. These smaller regional and local operators who serve SMB’s make prime acquisition targets. They are flying below the radar because they are too small to attract private equity or a deal from a larger pubco, but an excellent fit for Digerati. There is a tremendous opportunity to consolidate more minor players in the highly fragmented market of communications operators.
DTGI has a very disciplined approach to acquisitions. Acquisition targets are local operators with annual recurring subscription-based revenue of $2M-$10M that run a certain integratable technology stack. DTGI has grown organically and completed four acquisitions over the past three years, increasing cost savings and operational efficiencies each time. Digerati’s revenue has increased from $200K in FY17 to approaching $15M in FY21. DTGI has proven its exemplary service in the SMB communications space, focused on migrating their customers from the cloud to contact center in the cloud, as well as rolling-up local operators.
Mr. Smith concluded his interview with Mr. Martin by emphasizing that the UCaaS market is currently valued at $67B and expected to grow by more than a $100B over the next five years. Market experts also anticipate tremendous growth in CCaaS from $20B to $72B over the same period. Digerati has a seasoned and successful leadership team in communications technologies and has gone public with similar past companies. A winning combination for any investor looking for deep undervalue.
Check out the entire interview here: Investor Connect