New Business Idea – Free ISD Calls (say, US to India)
Being in the US for over more than a year now, I have had to pay through my nose for all the ISD calls that I make – to India, Singapore etc. That was a problem to solve right there – why should I pay? Is there a way to make these calls free?
The genesis of this ‘Free ISD’ idea was in a conversation with a friend of mine (Arvind). As the conversation progressed about some other business idea that we were trying to brainstorm, I had this brainwave of offering Free ISD calls. For starters, I certainly thought it was a crazy idea. However, the more I thought about it, the more it made sense. Nothing revolutionary, Nothing iPhonish – it’s just a simple idea borrowed from the ‘Search’ and ‘Movies’ world.
Let me explain.
Search engines like Google are able to provide us services like search, google maps and other gamut of services – all for free. However, these services require a huge amount of processing power and lots of mathematical modeling (which in turn means, hiring a lot of smart Ph.D candidates). All these cost money. Google, however, as we all know makes it money through selling Ads for the most part.
Entertainment sites like Hulu stream movies and tv shows for free, some of them being fantastic classics. However, any person who has used Hulu.com would know that there is an advertisement for about 30 seconds every 30 minutes or so. Those ads pay for the movie itself.
I am sure, by now, the drift is very clear.
Why not, offer free ISD calls, with ads in between.
Let me explain a wee bit further.
What is the average cost of a per minute call from US to India? Some sites like Stanacard, FreeCallPlanet charge 3.3 cents per minute, while established players like Airtel charge 4 cents per minute.
For simplicity purposes, let’s just average both and conclude that the average cost of a per minute call from US to India is around 3.6 cents per minute.
A 10 minute call would cost 36 cents per minute. That’s about Rs. 17 (exchange rate taken at Rs. 48 per dollar).
The idea here is to place an ad just at the start of the call, and an ad every 10 minutes. That is basically two ads, working out to Rs. 8.5 per impression within 10 minutes.
From a customer experience perspective, restricting the ads, to say, 15 seconds duration would probably be optimum, although some tests need to be done to validate that.
So, there it is – an extremely effective way of reaching a consumer at a very low cost.
Why is it effective?
a) Low cost
b) High impression – brand recall of these ads will be very high
c) Hopefully, will lead to increased revenues.
What kind of companies might want to put their ads? Well, let it be context-specific.
a) Money – Marketing money2india.com, Western Union Money Transfer etc
b) Stock broking – NRI broking companies
c) Gifts to India – Companies which supply gifts to your loved ones back in India
d) If consumer demographics are collected well, marketing of Shaadi.com type websites might also not be a bad idea.
What are the disadvantages? And Solutions to those?
a) The consumer might be turned off by the ads – Well, no way out for this. He/She is getting ISD calls for free. Whosoever doesn’t like it, will move away to paid services.
b) The consumer might be apathetic to these ads – Here is where creative ads come into play. A 15 second, creative audio ad competition will do the trick.
c) Conversion might be low – That was always the case with Google ads, ain’t it? The right placement of ads is definitely going to be the key.
What about competition? And Solution for that?
a) Internet Messenger to Internet Messenger talk is free anyways. What is new? – Well, the pervasiveness of computers in India is not as much as in the US. Mobiles are more pervasive, hence it makes more sense to call mobiles than computers.
b) Skype to mobile – Well, this one is definitely a competitor. But then again, which company doesn’t have competition. We need to work out details to beat the competition.
c) Vonage services, VoIP to VoIP is free – Yes, it is indeed free. However, I have heard hundreds of complaints from my friends wherein the broadband in India was not proper and hence the VoIP phone couldn’t work properly.
Any other ideas in concurrence with this?
Oh yeah. If this idea takes off, we can as well extend these services to inter-city (STD) calls. Say, village to village calls might have agriculture related ads etc. Service extension ideas are plenty.
The idea is awesome. So?
Here is where I have a problem formulating my business case. I, for one do not have the capital to set up an Airtel network nor do I have the capital to borrow Fibre Optic capacity. I am definitely not a company that can advertise like money2india.com or shaadi.com. And, starting an advertising company is a far shot. So, who am I in all this idea thingy?
The only role I think I can play is bring the advertisers and the phone companies to-gether to think about this idea. However, once I do that, there is every chance that they will cut me off and strike a deal with one another. The question really is, what can I do to build a business here? Rather, is there a business case at all to this idea – for me?
Thoughts are very much welcome and would be appreciated.
Did you enjoy this post? Why not leave a comment below and continue the conversation, or subscribe to my feed and get articles like this delivered automatically each day to your feed reader.
Interesting idea. Couple of points:
1. The idea of Ads disrupting a conversation might not go well. Remember, the two examples that you have mentioned ( Google and Hulu) do not display/put ads in a way that they disrupt the basic service — Google search has ads in a small space compared to the rest of the Web page and Hulu has ads similar to what we are used in TV.
2. VIOP is very much prevalent in the commercial sector. Most of the companies which have to make calls to the US dont use traditional phone lines , but have some VOIP solution. So companies might not be a good target for this product. But Cost-Conscious individuals may be a better target
Now … Where are my 2 cents
The idea is not really new. I was using one such service few months back. They were playing an ad during the time the call gets connected to India. Also, the max call duration used to be 5-7 mins. All this for free! The word “free” attracted hell lot of ppl in US and at times we need to try atleast 10 times to get connected. This works well only if you set up a good infrastructure, and that needs lot of money initially.
I think it depends on your target audience. Village- Village ISD might work, agricultural ads might be helpful and this can work with students in USA.
But being interrupted every 10 mins might be annoying, however great that ad can be and you cannot even generalise and decide one great ad for all.How about an ad every 30-40 mins ?
About VOIP’s you might have seen just one side of the coin, I am happy with VOIP and many of my friends. VOIP is convenient and gives unlimited talk time for as low as 10-15 dollars.It is a decent bargain to talk to near and dear.
Also my company uses VOIP, it is very effective. As commented earlier your idea might not take off commercially with companies.
This idea might work, but may be I am one among those wrong customers.
@Procrastinx – I agree that Google’s way of ads is non-intrusive. However, Hulu is very much intrusive and part of the whole package. And yes, the business idea was never targeted to commercial companies, since companies can afford dedicated bandwidth (and hence VoIP) while individuals can’t or are rather helpless about it.[Imagine a 2MB line given to a colony of 500 homes. You do know why streaming sucks
]
@Sreedhar – Ohh, I didn’t know that. Actually, before I published or rather wrote this post, I did google to find out if any such service existed. Since I couldn’t find any, I went ahead with my post. Yes, I do agree that the bandwidth and infrastructure costs would be huge. I was trying to look for a business case for myself to market this idea to the existing players, who have a much better idea to handle the infrastructure than an investment into it. That would be suicide for today. Someday in the future, you never know
@Spruha – An ad every 30-40 minutes does sound enticing, doesn’t it? But then the economics seemingly do not work out for the free model. Say 30 minutes and 3.5 cents per minute. That makes it 1.2 dollars per ad or two – which is quite expensive (imagine 10,000 indians going ga-ga and dialing away to glory to their long lost hospital, school and college friends). What 30-40 min idea can do is subsidize the entire cost of payment. Say today, you pay about 50 dollars for 1000 minutes. Ad placements would probably bring down that cost to about 20-30 dollars – but then, the complaint is, if I pay then I don’t need the ads interrupting my conversation – and there goes your business case into the spin
Thanks for all your thoughtful comments
Looking forward to more such interactions!