One of the fastest-growing mobile apps in Boston is available for Android phones. But they don’t want you as a user.
Instead, mCent is focused on places like Brazil, Indonesia, India, and 90 other emerging economies where some 1.3 billion people own Android smartphones, but don’t typically buy data plans to go with them. Developed by a startup called Jana, mCent allows people to earn credits they can use to access the mobile Internet for maps, instant messaging, or web searches.
The catch? To get the credit, you need to be willing to interact with marketing messages, or sample other apps. Install an app to listen to streaming music, read the news, or connect with friends, and you’ll get a few rupees deposited in your mobile account that can defray your data charges. It’s a trade plenty of people are willing to make; within 18 months of mCent’s launch, the company says, it has 30 million users.
Many other companies — including Facebook — are taking similar approaches to reach consumers in less-developed countries. Sometimes it is known as “sponsored data” or “zero-rating,” and it can be controversial. Back to that in a minute.
As an MIT faculty member, Jana chief executive Nathan Eagle worked on projects in Kenya that relied on mobile phones to gather information about things like blood supply levels at hospitals. But he observed that something as simple as sending a few texts about the supply levels “was a big fraction of a nurse’s salary for the week.” To deal with that, he wrote the software that made it possible to reimburse the nurse for the cost of a text message — 10 Kenyan shillings (which included one shilling extra to say thanks.)
That idea, he says, eventually led to mCent, launched in 2014. The app is basically a marketing mechanism to get users to download and try other apps, or redeem digital coupons for products, rewarding them with money in their mobile account. For every megabyte of data they use accessing an advertiser’s content, he explains, an mCent user earns at least one additional megabyte that can be used to access any content.
“Our members want to use Google, they want to instant-message, they want to use the Internet on their phones like we use the Internet,” says Eagle.
And in the 93 countries where people can use mCent, Eagle explains, “We are going after the wealthiest 10 percent of consumers, since they are the ones who have smartphones.” These consumers are also the most attractive to advertisers and app developers — even if they are sensitive to the cost of data plans.
Jana has 80 employees, all in Boston. Since many work directly with Jana’s partners around the world, they speak languages like Mandarin, Tagalog, Portuguese, and Bahasa. Jana has raised nearly $40 million in venture capital, some of it from Boston-based Spark Capital; Eagle says he has set his sights on becoming “a profitable, $1 billion business.”
Another Boston company, Aquto, is taking a different tack to the problem of subsidizing data usage on smartphones. Aquto started in the United States and Europe, working with mobile carriers to create these kinds of free data offers, which come directly from the carriers as opposed to an app, like Jana’s.
“More eyeballs are on mobile than any other devices,” says Aquto chief executive Susie Riley.
Trying to reach those eyeballs in developing countries is one reason that Google is working on something called Project Loon, testing high-altitude balloons that are designed to blanket large areas with free LTE wireless signal — the same high-speed stuff you pay AT&T or Verizon for. (Loon is run by Mike Cassidy, an MIT and Harvard Business School alumnus who started two companies in Massachusetts before heading west.) What will people use that free bandwidth for? Perhaps accessing Gmail, YouTube, or Google’s search engine.
Facebook also is interested in supplying free access to mobile phone users; in 2013, it launched a project called Internet.org, with chief executive Mark Zuckerberg calling connectivity “a human right.” The initiative, since renamed Free Basics, has provided free access to a hand-chosen collection of sites — including Facebook, of course — in countries like Columbia, Senegal, and India. “Their future growth isn’t in North America or Europe,” Eagle says of Facebook. “This is critical for their business.”
But India’s telecom agency may be on the verge of banning Free Basics this month, if it determines that Free Basics is anti-competitive and breaches consumer privacy by pulling in gobs of information from users.
Facebook spokeswoman Eliza Kern says Facebook has opened the Free Basics service to other sites and app developers and the service is intended as an “on-ramp to the Internet,” encouraging users to eventually start paying for their own data usage and accessing anything they please. She says half of Free Basics users start doing that within a month of going online for the first time.
Facebook doesn’t release user numbers for the Free Basics service. But Eagle boasts that his company’s mCent app has “many times more daily or monthly active users than Facebook — close to a million daily active users,” referring to the social network’s Free Basic service.
As Jana, Facebook, Aquto, Google, and others race to build new on-ramps to the digital realm, it will be a years before we know whose strategy works best. Maribel Lopez, who follows the mobile industry for Lopez Research in San Francisco, says we’re witnessing new business models taking shape “that will get the rest of the world access to apps” and the wider Internet. It will also supply companies and advertisers with access to vast populations of consumers and their data.
Be skeptical when you hear publicly traded companies talking about Internet access as a human right. “Nothing is free,” Lopez observes. “Someone pays somewhere.”
Scott Kirsner writes the Innovation Economy column every Sunday in the Boston Globe, in which he tracks entrepreneurship, investment, and big company activities around New England.
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