Signalhorn Eyes $100 Million Revenue Mark in Coming Years
[Via Satellite 09-08-2016] Signalhorn, a Germany-based managed communications service provider, anticipates having revenues that crest the $100 million mark in two years time. The company recently made an acquisition that doubles its current revenue and deepens its footprint in Africa. Robert Kubbernus, chairman and CEO of Signalhorn, told Via Satellite that the company is taking several new steps including a differentiated hiring strategy and a newfound emphasis on cloud data services to boost growth. While declining to name the acquired company, he said Signalhorn is busy performing the revenue-boosting integration now and should have news sometime in the beginning of next year.
“In two years time because of this acquisition and a couple of others we are looking at, we are going to be above the $100 million revenue mark, which is a good number for us to be chasing as far as revenue is concerned,” he said.
Signalhorn’s primary market is Africa, serving customers in enterprise, energy, government, and Non-Governmental Organizations (NGOs). Europe and the Middle East are also important markets for the company. Beyond acquisitions, Kubbernus pointed to Signalhorn’s revamped approach to sales as another major catalyst for growth.
“We are spending a tremendous amount of time developing go-to-market partnerships, leveraging our relationships with resellers, telcos, and other organizations that have a certain geographic footprint or have a region that they are really strong in. Instead of competing with those individuals, we are really working hard on partnerships. We think that is going to be our growth strategy for the next couple of years … instead of trying to go at it alone, the partnership strategy is a strong one for us,” he said.
Starting last year, Signalhorn hired a number of new sales executives from within the terrestrial communications industry, rather than from the satellite industry. Kubbernus said the hiring approach is just beginning to yield its first successes, along with a variation in the types of services that customers are looking for. While Signalhorn’s business is 70 percent satellite, 30 percent is terrestrial, and the company is seeing demand for additional services. As a result, Kubbernus said the company is expanding its capabilities in new directions.
“We’ve also started to push into cloud and data services. That is a result of us owning our own infrastructure and a lot of available capacity within our facilities to turn them into data centers for our customers. We are launching, and started a whole program around cloud and data services. In preparation for 2017, we will spend the rest of the year building out our full data services. We are going to dedicate approximately 25,000 square feet toward data center services and cloud computing,” he said.
Kubbernus explained the logic behind expanding into data services as merely an extension of what Signalhorn is already doing with its network. He said with data, voice, and application traffic already going over the network, it made sense to go back to those same customers with cloud and data services or storage capability.
Concomitant with the development of these new services, Signalhorn is also increasing its focus on the security of the packets it sends. Kubbernus said the company made an investment in a department of cybersecurity and has put in place a chief security officer. Additionally, he said more Request for Proposals (RFP) are asking for information on cybersecurity practices.
“On the bigger RFPs you are scored against your security stance, and we have seen that come creeping up more and more over the last two years. If you don’t have an answer, your chances of winning the bid are not good,” he said. “It can be a sales benefit when you are pitching to the big customers that you have made an investment in security and that it is very important to you as an organization.”
In Signalhorn’s core geographic markets, Kubbernus noted the continuation of a decline in pricing for satellite capacity. Though not unique to Africa, the continent has experienced prolonged oversupply, leading to lower prices, he says, highlighting that new entrants, such as countries with newfound space programs that start with a telecommunications satellite, as a cause because such organizations are typically less sensitive to profitability. He also listed improvement in throughput and the recent success of Ka-band compared to 20 to 25 years ago as other influencers. Lower prices have been beneficial for Signalhorn, but Kubbernus said customers are aware of this trend and are using this information to negotiate for better prices for their own services.
“It is a very transparent market as far as pricing, so we have had to be highly competitive. We still maintain a very strong renewal rate, but we have to work harder,” he said, adding that price has been top of mind for many customers, which Signalhorn has to also keep in mind for upcoming contract renewals. “With everyone having budget constraints, they are looking at every way that they can save money. So as a company we with our supply chain and vendors are experiencing better, more competitive pricing, but at the same time we are compelled to pass those onto the customer to maintain them.”
Kubbernus does not expect the pricing decline to bottom out until sometime in 2017. Until then, he expects it to continue, but said that demand for satellite capacity remains strong.
“We don’t see any customers giving capacity back. The need is there. They need more and more, but they want it at better and better prices,” he said.