This VoIP app lets you make free calls to any number, even with 2G networks

There’s a new VoIP app in the market you might not have heard of. It works seamlessly on 2G, and you can call non-app users including landlines and mobile phone numbers.

The name’s nanu. Believe it or not, this little known app currently has 1.7 mn users in India, and is growing at 20k users a day.

How this works is that while you’re waiting for a call to be picked up, a short ad will play over the ringtone. It’ll end immediately when your caller picks up. You don’t have to pay because the advertiser is paying for you. The company claims to put some $20k a month into the wallets of Indian telcos.

Business Insider sat down with Martin Nygate, co-founder of nanu to understand how they do what they do.

How did you optimize your app to work on 2G networks?
We use similar CODEX to everyone else, but we’ve completely changed the way VoIP is transmitted over the internet, and that helps to save up to 80% bandwidth.

Not many Indian telcos have opened up to VoIP
That’s natural. Over 80% of a telco’s revenues are from voice, and they see OTT players as a threat. The difference between a Skype and us is that while they’re not paying telcos, we are. We’re actually paying them more for a call than a regular subscriber.

Future of India’s telecom industry
What’s happening now is telcos are moving from being suppliers of services to being suppliers of data. 5 years down the line all telcos will only offer data, and the OTT players will offer video, calls and other features. Most smart telcos are gearing up to the trend. They are trying to find the most economical way of offering data. Telcos in India must understand they need to maintain a revenue stream to invest in infrastructure.

Are you worried that when everybody gets o to 4G there will be no Nanu?
Quite the opposite. Currently over 95% calls on nanu are to different numbers. As the networks become more mature, the market dynamics will change in our favor, i.e. more people will be making nanu to nanu calls.

There’s a fallacy that if you have a 2G VoIP app, you can take off in emerging economies. A Viber to Viber call won’t work if either one doesn’t have data activated.

Data users in emerging economies often turn their data off because there’s an enormous amount of data hemorrhage, without their consent or knowledge. We’ve been having high level meetings with TRAI to discuss this. We feel this is very naughty.

..but video ads are the way forward.
We feel the current forms of ads are detrimental to brand value and brand equity. We believe the future of mobile advertising should be non-intrusive and actually beneficial for the user.

..but intrusive ads work!
That’s not the point. Research shows over 30-50% of your data is being consumed by mobile ads.

Video ads may work. However, what we’re seeing is the 0.5% who click on the video and watch it, and not the 99.5% who don’t, and get annoyed by it. The question is how you can make money without annoying everybody.

Also, while India has 1.2 bn people, you can churn, but you’ll destroy your brand by that.