“Our USSD platform ‘Fonetwish’ creates a layer between internet and the user via a cell phone”

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U2opia Mobile is a very special organization focusing its efforts where very few organisations have set their eyes – and it is the space of USSD. Its USSD platform innovatively creates a layer between internet and the consumers using a cell phone – this provides a whole new dimension to connectivity in geographies where it is needed the most.

Sumesh Menon, Co-Founder, U2opia Mobile speaks with Zia Askari from TelecomDrive.com about the company’s current focus and future plans.

Could you tell us a little about U2opia Mobile and the company’s focus?

We started in 2010 and focused on this phenomenon which basically meant that users wanted to consume more internet. But the reality is that a lot of people did not have access to the internet and the problem hence was to bridge the gap. It was the telecom provider which could solve the problem. That’s where we indulged in a contrarian play.

In the world of 3G, we went out and worked on a first generation solution called USSD which is like SMS and text. When everyone was talking about 3G, speeds and its utility we realised that 3G while as a concept and technology was present, it wasn’t ready for everyone especially for a billion population.

It was ready for 300 million people in the US, 60 million people in Korea, but not a billion people in India or not in Africa because the networks needed a lot of money to bring it to a large mass. And also the people had to be able to pay and value them.

We leveraged USSD, which has been around forever. USSD was essentially a protocol that allows towers to talk to each other or network to talk to each other. We realised it has a browser like capability, which allowed one to go digit by digit, from one to the other. And the internet had a browser like capability, so we thought what if we create a Facebook on USSD equivalent and see if users would like that and this is the time when Facebook is still a visual medium right.

We connected with people like Facebook, Twitter and the internet publishers. We played a mediation role between them and telecom players like Airtel, Vodafone. We started with India and now have a 100 operators around the world. We are present in 65 countries, 100 operators, about 60 million users since 2010 when we launched the service.

Our USSD platform called Fonetwish creates a layer between the internet and the user via a cell phone allowing internet access as information and not just pictures or video.

We utilized use-case scenarios such as accessing Wikipedia to do homework, accessing TripAdvisor when one’s travelling abroad to book the nearest hotel , accessing Facebook to stay in touch with friends to build these services on USSD.

With the buzzword in the telecom space being data and every player utilising data in a different manner, what is the kind of innovation that you are seeing in this space?

The evolution of data in the telecom space is an interesting phenomenon. With operators now spending a huge amount of money on transforming their networks, there is immense opportunity in the industry. And this is pretty much bang in the middle of what U2opia Mobile does. And our business is actually evolving to exactly that, probably not solving on an infrastructural level, like there are many levels to solve a data problem. One is just the infrastructural that will give you more spectrum, higher speed, and stuff like that and then there is the consumer level, how is the consumer using the data. It kind of resonates.

Isn’t Fonepass against the premise of net neutrality?

Actually no. Because its ad based funding, it is like a newspaper which will give free information but there is an ad over placed in between. The net neutrality debate is always about restricting the purpose of use of data. Users always have to use this data that they get only for a specific use. When you restrict data for one particular use case, that’s where the problem is. Here, you can do with the data whatever you want to do.

In this case, the user has to watch the ad but that’s his choice, there is no restriction. It is like a game. He comes and earns this data or answers questionnaire, this happens everywhere in real life, it is like discounting. If you do something, someone else is paying for your data. And you can use the data for anything, so there is no question of what you can use the internet for, it is just who is paying for it.

So this product is available in India?

No, it is not available in India. We will bring it to India at some point of time, but not right now. Right now we are now talking to operators around the world. It’s a very common concept in the US. A lot of players in the US are trying to do it. But this is less for the US and more relevant for the emerging market.

What’s your take on Africa, Indonesia and Vietnam as potential markets?

Yes, we are working with a lot of operators in Africa. And there is so much excitement on the ground. All across, yes, all emerging markets including India, it makes sense. So, this is something we’re working on.

Do you think this will work in India, owing to the stringent regulation by bodies like TRAI?

So, the good thing is, even in India, this product that we’re talking about is very much something that TRAI would encourage because you’re actually offering free internet. Everyone is talking about giving free internet to people which can be used for whatever users want. The issue that TRAI and everybody else had with net neutrality was about the restrictions. So, let me put it this way, radio is a good example. Somebody has to pay for the music, in the case of radio, the ads are paying for the music. That’s exactly how you think of sponsored data, at least the product we have.

Tell us more about your Fonepass solution and something about how you plan to expand?

We also have two more products which are actually straight forward, either somebody can subsidise the data or he can actually ask data from somebody else. When you run out of data, I gift you data. That’s the solution that we have, and lot of operators are talking about it, they also have the solution that we provide to operators across Africa.

And the third is where you can take data on credit. Let’s say I have run out of data and I can only pay for it next month once my salary comes, and I am going to borrow it from the Operator and I will have to pay a convenience fee for that for holding it for a period of time.

It is essentially about increasing data adoption. One is somebody pays for your data, the other is you get gifted data and third is you’re actually loaning data from the operator. All these solutions are your Fonepass data suite which we’re rolling out in multiple countries. Operators came to love this because it kind of helps them, we’re a mature player with the 100 operator footprint.

This is really how U2opia Mobile is expanding in the telecom and data space. So to sum up, we have two solutions, one is pre-data which is before they come out to the internet fully which is your USSD platform. The other is an early data platform which allows you to get people on to the internet

And what is your go-to market strategy, how you engage with operators, and what kind of players you work with?

The good thing is over the last 6 years we have been able to establish really strong relationships with groups itself, like, Tigo, Claro, MTN, and Airtel. Since we’re already working with these teams, it is fairly straightforward for us to have conversations. We identify people who might be interested in our solutions and have a BD team that actually goes out and talks to them about new solutions and gets in new ideas. That’s our go-to market.
We’ve been blessed with fairly a lot of organic pull. There are a lot of things in the works right now. There are some that are already in the soft-launch stage. We’re just waiting for a joint announcement with the operators in that case.

So, how do you look at the SAARC market in general?

We like Africa, in general, as a market, which is a huge market. Africa is a very big market for telephone, I mean we’ve seen a lot of people moving there, in fact Indian companies that have actually done very well here. We have been invested in Africa for a long time. South Asia, which is the whole Bangladesh, Sri Lanka, Nepal, the whole SAARC region is interesting, is very much mixed, to some extent India as well, but on a much smaller scale.

I think in Asia, the big markets for telecom out of India are Indonesia and Vietnam and we invest in those markets aggressively. I think this whole sponsored data space is getting very hot and interesting, and we kind of want to pursue that and most operators will find this extremely appealing because their objective is to get more people onto data. Our solutions do exactly that.

Tell us something about your operations, how big is your team?

Our company is about 220 people, headquartered in Singapore. We have a big operations base in Delhi. We also have people in Dubai, in South Africa and of course we have a satellite office based in US but most of the operations are run out of here.
We are Series A funded by Matrix Partners and Series B by Omidyar but this was in 2011 and 2014. Now, we are ready to expand, we expect about 250-300 people by next year. Like I said, we are present with almost 100 operators around the world and close to around 60 million users around the world.
So now a lot of operators are looking towards, virtualising their functions and are talking about, OSS and BSS, which becomes the first option to go for. So how do you look at this space because this is another very interesting space where operators are spending and they are looking for forging partnerships?
I think, some of the larger players like Ericsson, Huawei are probably going to take a lead in that space. I think, a lot of people feel that network level technology innovations are plateauing in the telecom space. Most of the interest is in the direct consumer internet, OTT play.
I feel like, they kind of work together. For a lot of OTT players to succeed now, they have a huge dependency on telecom because all the products that they have, need a big pipe, it is like, fibre, the internet and the companies that use internet. So in the 90’s, when they came, there was not enough fibre, they were just busy laying fibre, and there were a lot of companies that were driving content, the whole dotcom boom, and then the dotcom boom went down and then all this fibre was there and there were a lot of people that took advantage of this fibre and built up. I think we’ve reached capacity now.
With the kind of data consumption, countries across the world and mostly emerging markets, are not ready for a kind of demand and data that is coming in. Even if they wanted it, it is not only about getting the data but also expanding how much data they can provide. Because India is just starting to see the onset of video, in China the video is extremely popular and their network is trying to support that.
The first generation of data consumption is coming to India. Like for example, more than a year ago, Facebook introduced something known as auto play on video, but they did not introduce auto play in India because they realised India did not have the bandwidth. And then at some point, they actually started introducing it to India but at least in the urban centres. These guys are not stopping there, there’s more coming, there is live stream, beyond live, there is VR, VR consumes a lot of data. And VR, not only gaming, but VR experiences. It is going to be a big thing in the future, what people are projecting, it is going to consume more and more data. So, all the networks are, I think one generation behind what the networks should be today. And that is essentially what is going to impede the use of technology to a large extent. So, in China, for example, there are a lot of video start-ups that are doing extremely well, making millions and millions of dollars, all video based content. Like video calling, it is like mini TV, studio shows that are happening on phone. Those start-ups are not working in India, there have been attempts to make those similar kind of products in India but they don’t work. The network and infrastructure over here will not be able to support that.
So, now what are some of the big innovations that you are working on beyond these platforms that you mentioned?
We have an internal program, known as Catapult, at U2opia Mobile. We have a program called the Catapult program. Essentially Catapult takes a start-up to the next level, so what it does is, it puts some money aside and provides for start-ups and start-up entrepreneur, we are looking at a very small team, pods, almost 3-4 people.

The idea is, as we are scaling, we don’t want to fall in a big company syndrome, where we’re not able to come out with new ideas, we’re happy with the kind of solutions that we have and we’re not able to think of new disruptive ideas that come.

What are some of the focus areas?

These include mobile specific start-ups. For example, one actually helps you decide on your next smartphone. Think of it as, what Zomato is to food, and what Rotten Tomatoes is to movies. It is called Mr. Phone and that’s simply what it is. It is Rotten Tomatoes for phone, so you can simply go and figure out what phone you want to buy.
The other one is very interesting, it is concerning data, from a consumer’s perspective. It helps you manage and track your data usage. It tells you how much you’re spending on Wi-Fi, how much you’re spending on mobile data and what your spending’s are every day.
But it’s a direct consumer app. It is called Flo. It tells you what data consumption you had.
So, what is the kind of growth that you’re looking at in the coming years or so and where will this growth be coming from?
We expect most of our growth to be coming from our Fonepass data suite because that’s where it really is. We would think that at least 15-20 operators by the end of the next financial should have deployed some of our, so out of the almost 100 operators that we have, at least 20% penetration of our new product line into these operators. And therefore most of our revenue growths or incremental revenue growth or completely new revenue growth is going to come from that, traditional business is going to grow by about 10-15%

And in the coming months, you said you’ll be launching your products in India, when can we see that?

The sponsored data products at the moment, we don’t have any visibility on India, but we have a lot of pipeline and commitments for Africa, so we expect more announcements to come from Africa before we reach India. For India, I think, the products that we are doing like Flo, Mr. Phone and everything else that is coming from the Catapult programme is actually meant for the digital Indian market, that’s what we do. Telecom base, I don’t think we are doing anything specific for the Indian market. They are mostly for Africa and South America.

Where is the revenue coming primarily from? Africa or South America?

Yes, revenue is primarily driven by the African and South African operations. That’ll continue to grow, in fact more and more operators are getting on-board in Africa, like today its Congo, two days back we had another one in Cameroon which had gone live so more countries in Africa and it’s a 56 country continent and we have covered only 50% of it so we still have a lot of people to go through.