SAN ANTONIO, TX--(Marketwire -01/11/12)- Digerati Technologies, Inc. (OTC.BB: DTGI.OB - News) (OTCQB: DTGI.OB - News), an established and award-winning provider of cloud communication services, today announced its key business opportunities and strategic initiatives to drive long-term sales growth and profitability.
The Company's key strategic initiatives to successfully meet its long-term business objectives include:
Repositioning the Company around its cloud and session-based communication services, segments of the industry that are experiencing significant growth and where there are new business opportunities for Digerati. Augment its current carrier-to-carrier sales distribution model with a higher margin model that enables its Value Added Resellers (VARs) to offer cloud and session-based communication services to the enterprise market, primarily the small to medium sized business (SMB). Leverage its existing global network and partnerships to provide new and innovative international voice over Internet ("VoIP") solutions in high demand by carrier and enterprise customers. Continue enhancing its infrastructure and back office system to streamline operations, automate key processes, and support the scalability of its VAR distribution model. Carefully manage expenses, selectively reducing them wherever possible, and secure additional financing to fund working capital requirements, expand its sales efforts, and meet debt payment obligations.
Since FY2010, the Company has taken definitive actions to transition Digerati from a traditional international telecommunications carrier to a global VoIP and cloud-based telephony service provider. In FY2011, Digerati began its corporate transformation that included a name change formally launching the Company's strategic shift. Management believes the Company's strategy that emphasizes its cloud-based technology platform and global session-based communications network will allow it to capitalize on the growth opportunities within its industry.
During FY2012, Digerati commenced the next phase of its transformation that included implementing key infrastructure upgrades to further enhance its ability to sell higher margin cloud telephony applications and session-based communication services over its global network. In September 2011, the Company deployed a Sansay VSXi system that serves as the foundation for Digerati's next generation technology platform and is the cornerstone for its product diversification strategy. The deployment of the Sansay system was a key architectural building block for seamless interoperability between Digerati's global network and its cloud telephony application platform. The combination of the Company's existing global network with its cloud-based telephony platform is expected to significantly improve the value proposition of Digerati's product line. The result is the potential to generate increased value for shareholders in coming years as Digerati transitions to its growth strategy that emphasizes high-margin cloud-based telephony applications while maintaining its strong reputation as a global provider of VoIP telephony services.
Through its fiscal year ending July 31, 2011, Digerati's primary line of business was transporting voice traffic over the Internet for other carriers that included traditional telecommunications service providers, other VoIP carriers, and mobile operators. Over the course of the last six fiscal quarters, the Company has developed and introduced an extensive portfolio of cloud-based telephony products and services, including enhanced applications that are not available through the traditional telecommunication network. The Company's products, branded as Only in The Cloud™, are feature rich that translate into savings and simplicity for end-users. Digerati's Only in The Cloud™ products are specifically designed for the needs of the SMB, call centers with international communication requirements, and Internet service providers that do not have the scale necessary to acquire their own telephony infrastructure.
To sell its products, the Company recently embarked on a cost effective sales and marketing strategy that utilizes VARs as its distribution channel. The VARs that Digerati targets have established relationships with small-to-medium sized businesses which represents a tremendous growth market for the Company's products and services. Digerati's VAR program targets PBX vendors, information technology ("IT") services firms, managed service providers, systems integrators and broadband providers that lack a cloud telephony infrastructure, but have an embedded customer base in need of telephony services. Digerati's all-in-one cloud telephony platform and global VoIP network transforms its VARs' business model by giving them the ability to sell an end-to-end solution that includes every component required to roll out a domestic or global telephony application for their customers.
As a low-cost operator with a vertically integrated platform and carrier-class global network, management believes the Company is ideally positioned to become a "one-stop" provider of cloud telephony applications with a global reach that is delivered Only in The Cloud™. The Company's mission is to deliver its cloud communication solutions with unparalleled quality, reliability, and support.
In an effort to achieve it financial objectives, the Company implemented cost cutting measures during the 1st and 2nd quarter of its current fiscal year to align its expenses with its current business model. Management anticipates that its cost cutting measures and the change in its revenue mix of its products and services will result in positive cash flow from operations during the 4th quarter of its current fiscal year. To work towards improving its financial foundation, the Company has also entered into agreements to derive additional income through the sale of non-core assets.
Arthur L. Smith, CEO of Digerati, stated, "FY2012 is shaping up to be a critical turning point for our Company. We have made significant progress in enhancing our core infrastructure to support our growth strategy and continue to win new business opportunities with enterprise customers through our VAR relationships both domestically and internationally. We expect to report more on these new business opportunities and on our sales progress in the coming weeks. It is our intention to continue to control our costs and grow our business by securing additional funding to meet our working capital needs and to support continued expansion of our sales efforts, specifically as it pertains to our VAR distribution model. During FY2012 we expect the top-line revenue from our legacy carrier to carrier business to decline as we transform our business model and place a stronger emphasis on our higher margin cloud telephony applications and session-based communication services. However, we believe that this transition will increase margins, improve brand recognition, create a more stable revenue base, and allow us to target more rapid profitability growth that we anticipate will ultimately result in increased shareholder value."
About Digerati Technologies
Digerati is a three-time recipient of Deloitte and Touche's Fast 500 Award for recognition as one of the 500 fastest growing technology companies in North America. Digerati is meeting the global needs of businesses that are seeking simple, flexible, and cost-effective communication solutions. Digerati's cloud-based services include a fully hosted IP/PBX, VoIP transport, SIP trunking, data storage, and customized VoIP solutions for specialized applications. Services are delivered with unparalleled reliability and performance over Digerati's carrier-class global VoIP network, which has been built over the course of a decade. For more information visit www.digerati-inc.com.
The information in this news release includes certain forward-looking statements that are based upon management's expectations and assumptions about certain risks and uncertainties that can affect future events. Although management believes these assumptions and expectations to be reasonable on the date of this news release, these risks and uncertainties may cause actual events to differ from those contained in this news release. The risks and uncertainties include, but are not limited to, continuing as a going concern, availability and cost of our present vendors and suppliers, and absence of any change in government regulations or other costs associated with data transmission over the Internet or transmissions in foreign countries.
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