NANU a voice calling app has been in the news for providing free calls between the VoIP app and also to cell phones or landlines. Latest media reports suggest that telecom operators are against the idea as the VoIP app is posing a big challenge to their business. However, Martin Nygate, CEO/Founder, NANU states that they are here to make friends with the telecom providers and not to wrestle their business away.
In an exclusive chat, Nygate shares his views about India being a potential business destination, the equation with telecom operators and issues related to ad blocking that affects publisher’s revenue.
The issue of call drops is affecting users across the country, how does NANU try and bridge that gap?
We work with the telecom network so we can’t change anything. In fact, we are subject to call drops as everyone else. There are two types of calls; an app to app call which is purely a data call and that is not subject to call drops. NANU provides free calls to any landline and any mobile and that’s the second type of a call. In this type of a call NANU delivers a call to the telecom operator and the operator delivers it to the user, and if the call drop is at the telecom operator’s end, we can’t help it.
There is a constant tussle between OTTs and TSPs over revenues and data calls what do you think is the solution to this?
That’s a complex issue, first of all we are different from other OTTs and we are actually paying the TSPs. So currently, we pay something in the magnitude of $20000 every month to them for delivering calls. In fact the TSPs earn more money from us than they make from consumers. We pay them more than you pay them, so effectively, the TSPs should be quite happy with us because we actually pay them more.
We can pay them more because we have a revenue stream which is very different from anyone else. Skype, Viber or WeChat don't make a lot of money and because we have the ability to add certain adverts over a ringtone we make the money.
It’s a little bit of a grey area right now. On one hand TRAI has said they will not ban VoIP, on the other hand TSPs are saying VoIP is eating up their revenue. If you have a partnership, like we are proposing to work with TSPs hand in hand they can actually make more money.
OTTs don’t care about TSPs and they feel that TSPs can earn money from the data, but the kind of data used by these apps are minimal and they can never make money that way. As a responsible provider I feel we must work together and ensure survival for all.
Does someone like a Skype or Whatsapp pose a threat to your business model?
No, because they can only pay the telcos, if they got a revenue stream. You need investors and you can throw billions of dollars at this, but the bucket is full of holes, you need to have money coming in not just money going out. If you don’t have a good revenue stream then you can’t do it.
Where does NANU see itself in 5 years from now?
Well globally there is an opportunity for a VoIP provider like NANU to be the carrier of voice calls over cell phones. Telcos have two networks, one is the voice and other is the data. The voice network is dying and the sooner they scrap it the better. For data calling, OTTs provide the services and we believe there is an opportunity for a single OTT VoIP player to deliver VoIP calls over cellular connections. We believe in one app doing the same thing for everyone than multiple apps doing the same thing.
What’s the technology that you use to make calls even over 2G?
We have developed some unique technology and it’s an innovation that has never been done before. This enables us to reduce the bandwidth by almost eighty percent in comparison to Skype, Line and Viber. As a result we are the only app that works perfectly well on 2G, 3G congested 3G and 4G. This is exactly the reason India is the perfect marketplace for us, which is a combination of 2G and congested 3G.
What’s the kind of user base you have in the Indian market?
We are growing massively. Currently we have 2.96 million downloads globally of which 2 million are in India. So over 60 percent users are in India and 20 percent users outside India are also Indians. So Indians love using this app. When you talk about growth it is misleading to talk about downloads, you can buy downloads. The key criteria are- what are your MAU and DAU, which is monthly active usage and daily active usage. Our MAUs (40 percent) and our DAUs (20 percent) are far greater than anyone else. We are working hard on getting advertisers on board so that we can generate revenue and use it to spurn even faster growth. Growth is not an issue because our value proposition is great, so right now what we are focusing on is to work with the advertisers in the community in India to generate the revenues to support the free calls.
How do you see Tier 2 and Tier 3 cities as a potential in India?
Those are my people. Tier 2 and Tier 3 city people are our targets. Our users are from these cities as well as rural areas. This is particularly important for the advertiser because people like FMCG companies want to reach out to these areas because they have difficulties reaching out to the rural areas. We have the ears of every user, and this is not like the radio that plays in the background, but you are actively listening to the tune as you wait for a call. It’s the rural areas where people buy smartphones to make such calls.
Which are the brands that are currently on board and how are they responding to it?
We have done campaigns for Oxigen, Big Bazaar, Lenskart and are hoping to do more campaigns in the future. Brands today have problem advertising on mobile phones. There are three forms of banners, pop ups and video inserts, and all three are either bad or terrible. It can also be detrimental to a brands value. In NANUs case the ads are completely non-intrusive, highly targeted, has a guaranteed delivery and has a positive effect on the brand. Every ad spot has 7 seconds and wee feel that is perfect.
Do you think using an ad blocker by the user is ethically correct?
No, I don’t think it is ethically correct.When you are consuming something you are consuming it for free. The developer who develops an app or a game needs to earn money and they need a way to monetize it but they can’t do it. I don’t think ad blocking is the right way. The right way of doing ads is the right way. A user blocks an ad because every form of advertising is annoying them. And in my view the advertisers are not doing anything to make ads beneficial for the user. Without the ad revenues the whole eco system will collapse in a few years.