India’s “missed call” mobile ecosystem
Imagine you want to use your cell phone to, say, order take-out food or chat with a friend, but you don’t want to pay for making the call, or the text message. The answer to that ultra-low-cost question is India’s fascinating growth of the “missed call” ecosystem, where callers who aren’t willing to spend on, well, really anything, use the “ring once, hang up” to signal to commerce companies and friends alike on the receiving end that they want to communicate with them.
It’s essentially the poor man’s text message: a free way to nudge another person or company, but which comes in just one flavor. Indian cell phone subscribers, of which there are 900 million accounts, have a monthly average revenue per user of $3, which is rock bottom low for even a developing market.
But an indicator the missed system has gone fully mainstream is that missed calls are increasingly being used as the basis of entrepreneurial ventures. Google India’s Managing Director Rajan Anandan called “India’s missed call culture” a “massive phenomenon” at an event on Monday night organized by the group Geeks on a Plane Delhi, which I’ve been traveling with this week.
Missed calls are being incorporated into mobile apps and services as a standard type of messaging like a text or an answered call itself. For example, an Indian cloud telephony service provider startup called KooKoo has been working with a Bangalore-based company to create an information market based around missed calls. If you want to know the latest weather, the latest Groupon-style deal, or the real-time bus schedule, you can send a missed call to the designated number and get an automated or manual voice call back with the answers you need.
While the missed call system is increasingly fodder for entrepreneurs, the phenomenon has been a slight problem for the cell phones companies in India, as the free service seems to make up a significant portion of cellular traffic. According to a study from the Learning Initiatives on Reforms for Network Economies (Lirne) a couple of years ago, over half of Indian cellular subscribers made missed calls to convey a message.
The 600 million cell phone users who have 900 million cell phone accounts in India (many people have two phones) are fundamentally fueled by the search for extremely low prices in many cases. There are a lot of interesting reward programs that could be compelling, and I mentioned a poop-fueled new company earlier this week.
What do you think? Are you using missed calls for an ad-hoc low-cost messaging system?
Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.
The “Missed Call Company” mentioned in the article is ZIPDIAL, http://www.zipdial.com
They have certainly invented the missed call phenomenon in India.
-Chaitanya
Principal Architect
KooKoo
So what happens if the operators start charging the callers for making “missed calls” to certain numbers?
As I understand, it is illegal to charge for missed to ANY number as per current telecom policy.
The simple solution would be to start charging for cellular usage when the call begins, not when the call is answered.
It would not be unreasonable to charge for usage like this. This “missed call” method is an exploit to a poorly structured billing model. Sure, it’d decimate this ecosystem, but it sounds like this ecosystem isn’t healthy for cellular networks.
I don’t actually see how missed calls are an effective signalling mechanism for transactions described in the article. Using a missed call to signal a callback to avoid cost doesn’t actually work, as you are still billed for the return call. Instead of missing the call, you could have just made the call and had one less step in receiving the information that you require.
If the signalling doesn’t actually require you to receive a response, I guess it could be valid, but there is very little information that you can provide simply by making a missed call.
In India incoming calls are free and hence not billed. Only outgoing calls are charged
In India, you don’t get billed if you receive a call
True
Only when you are not traveling and are in the same state or city the number was registered
As noted by others, callee doesn’t pay for the incoming call. Also, the telecom operator loses revenue since the calling party might be using another operator to call (although it can be argued that it all might balance out for some big operators).
In India, operators earn 20 paise per minute for every incoming call. Strange but true.
Because incoming calls are free, people in India use this “Missed Call” phenomenon very frequently to save up on their mobile phone bills. Why, I even know people in offices whose wives give them a missed call and the husband calls them back on the office land-line phone!!
The problem with this approach is that the Telcos would be under pressure to connect the call at the earliest … right now they take their own sweet time and add their own messages without thought to airtime usage …. I think this idea is a long time away – Reliance did try it briefly – but it went wrong for them ….
@ Physical – U don’t seem to understand the Indian Cellular network operation. THERE IS NO CHARGE FOR THE RECEIVED CALLS – doesn’t it make sense ? U don’t have to pay for the calls u receive, unlike the stupid policy in the USA ? To understand the “missed call culture” awesomeness, u gotta be in India. Period !
Incoming calls have always been free in India since the 1990s. Why would you be billed for an incoming call? It makes no sense. It also makes no sense why cellphone service in the USA is more expensive than land lines. It doesn’t require any putting in of cables like land lines do.
Incoming calls were chargable during the early stages of mobile in India 2000-2002.
This is how it works, for example: Poor housemaid has a cellphone, but cannot afford to make calls. She give the lady of the house a missed call to indicate she won’t be coming in today. If the person called needs more details, she gives a callback, since she is relatively rich and can afford to make the call. So someone did get charged, but it was the person who could afford it. However, the benefits of mobile communication were made available to a person who would otherwise have been unable to afford the luxury. So the mobile operator made more money than the case where no mobile communication would have taken place, due to affordability.
I assume by “poor housemaid,” you mean slave. India has lots of slaves.
@H : You assume incorrectly. I mean exactly what I wrote – A housemaid with relatively meager earnings. If you know of any “slaves” in India, I would strongly urge you to bring it to the attention of the authorities, since slavery of any kind is a punishable offence in India. You don’t want to be complicit in slavery by omission, do you?
Can’t be just India. I’ve seen students in Europe doing this for years. For instance to signal “Hey, I’m on Skype, turn on your computer and call me”. Or “Ring my phone when you get here”. Really all the time.
kaite, a good attempt, but one suggestion… when looking at other ecosystems than the one you have lived and breathed, would be great if you can collaborate with a local expert… this article was very light on depth… did not mention a large (although definitely NOT the original as some have claimed) organisation called zipdial (run by a foreigner!) which is making substantial money from this method by offering voting lines etc using such numbers (just like in foreign companies premium sms’s are used) – that kind of answers the question “physical” had as well… “physical” also obviously fails to understand the indian ecosystem saying “but it still costs money to call back”… too true, but he doesn’t realise that the original person who gave a missed call can’t afford the call (although you have kind of touched on it via the $3ARPU mention)…
would be great though if you collaborated with an expert from every local industry that you wrote about, as it adds a lot more depth to the article…
THanks @ringlerun, It is light on details and is just a short trend piece, but I did talk to about a half dozen locals as I am here in Delhi for the Geeks on a Plane trip.
Agreed – ZipDial has introduced quite a number of “enterprise” offerings based on missed-call ecosystem, including big-brand voting systems.
btw, pity that we can’t log in with our google accounts, but you have linkedin, twitter, fb api’s all integrated for a SSO type of scenario…
also, i note that the comments are moderated… hmm…
So you can’t afford to make a phone call; but half of the people have two cell phones to not make phone calls on.
Yes, people get multiple accounts so they can get the best deals from carriers. They also have phones with multiple SIM cards in them and the customer can swap out the card for the particular carrier when the carrier is offering some really good deal/rate.
hehe, we are like that onlly ;) but seriously this miss call business is getting annoying, i dont callbak anymore so the other person has no choice but to actually call up if its something important,unless of course its the bai(maid) or the repairman etc…and anyway this is chaiging rapidly as android phones cheaper than 7000 rs are entering the market and u can actually see the garbageman happily surfing the net on his cheap droid…
ive seen the panwala(guy who sells pan and ciggerettes) sporting an iphone…
Missed call is a phenomenon in India. One recent campaign which used missed call was the recent India Against Corruption group , the body behind Jan LokPal movement, which undertook missed call campaign to garner support for and disseminate information on the Anti Corruption agitation and the Jan Lok Pal bill
Never thought our “missed call” culture can be an entrepreneurship opportunity… Great!
I think the hit being taken by the cellular operators on this one is a fair amount of poetic justice for the fraud the operators perpetrate by massively over-charging SMS messaging.
If you take the loss of revenue due to missed calls in that context, I am sure it would not be as much of a trouble that operators are complaining about.
There is a start-up that was born (not in India) on the concept of “missed call”, and it has been used in several adv campaigns in Europe, it’s called 1ring.com.
They should check-out India, maybe…
We have been talking about ARPU and loss of potential revenue and ‘the missed call phenomenon’.Well, nice observation and all that. But hang on there for a moment, because i fail to understand why this should be a matter of concern or least be a topic to be covered. Are we forgetting the usage of applications that override calls and SMS functionality and create a dent for the operator? I am referring to applications that let you send photos, vidoes, text messages, and audio over the internet enabled cell(smart)phones. (Read as Whatsapp, Skype, Fring and the likes). What’s the big deal here? I believe the consumer has every right to use the product/service as long as it does not infringe on the ground rules set by the operator.
Well, would you also starting calling this a phenomenon if subscribers started throwing their phones at people to grab their attention?
DUH!
I am from India and I drop my daughter to her grandparents after school everyday. I call my dad a few minutes before arriving and he declines the call. He then comes downstairs and picks my daughter from my car. He picks up only when he isn’t coming :-)
One of my Friends’ summer project during college was “Missed Call Communication” in which he uses missed calls to create sms at the other end. He was pretty successful and he has got an International Conference Paper to his name on this.
yes, I experienced it while I was in India last year. what people want is a “poke” – a one bit communication between two parties. there should be an APP around this, just to do that
This article mentions 900m cell phone accounts, whereas another one (posted same day, by the same author) mentions 800m. Can we have fact checking across the site, at least?
As Vladimiro said, there’s 1ring, a European based start-up. The concept is basically the same you discussed: seeing the potential of missed calls under a brand new light, thus creating a link between consumers and brands.
I would not bet on any company taking advantage of a billing system loophole. As soon as the carriers find a way to change either their billing or connection system these business will lose. Enjoy it while you can. It’s no different than any other system/process in the world when a weakness is exploited. Those weaknesses get plugged as soon as possible or when it makes sense economically. Either the carriers will plug it or find a way to monitize it themselves.
Definitely a European idea too. My husband, from Spain, always tells me to give him a “lost call” (llamada perdida, known to the rest of us as a “missed call”) for me to let him know a message, like when I’m ready for him to pick me up or something (even though we’re in the US now with unlimited plans). The only problem I had with the system when I lived in Europe is that I could never figure out what message the missed call was supposed to convey :DD
In my country Nigeria, we call that ‘flashing’. been using it ever since the first mobile networks launched..
I’ve noticed this sort of trend in Asia, particularly Malaysia and also amongst students from those countries in Australia. It doesn’t cost to make a missed call but your number gets recorded. Great for those students who are on pre-paid and low credit to get someone to call them back. As noted, unlike the US, many countries don’t charge you to receive a call or receive an SMS.
This is not a ‘new phenomenon’, in Panama this has been like this for years, since the first cell phones where sold in the 90s. The great idea is to offer services in exchange of the missed calls; even though I don’t see how they profit from that, but that’s quite an original concept!
I only hear stories of customers billed for receiving calls coming from the US; is it like that in another country? I’ve never heard of that happening in LatAm. It’s a total steal to be billed for receiving calls; you should boycot/ocuppy telco carriers for that too!
This phenomenon is not just restricted to India. I’m Australian, I have been making missed calls to various friends for the past 10 years.
In Australia it is free to receive a call but costs to make a call to a mobile (assuming one is not on an all-you-can-eat plan).
Not sure of the newsworthiness of this information – sorry.
In Nigeria this is called “flashing”. overtime its intended effects wear out because of abuse.
During late 1990′s when cellphones where first introduced in India, the call rate was high as Rs.32 (around $1) for outgoing and Rs. 16 for incoming. So during this time, cell phone customers always inform their callers to give a missed call and they will call them at the earliest from nearby public telephone called PCO (Public Call Office) where the call rate was Re 1. Hence this mechanism of signalling to talk started the missed call nature. While over the time, outgoing call rate is very low and incoming call is zero, the the missed call signal has become another habit for Indian to signal – Like give me a missed when you reach home.
Waht do I think? I think it’s not a call culture, but an extreme tight-wad culture.
My personal theory is that this etreme tight-fisted attitude, lack of civic generosity, trust, and so on, is one reason this and other similar cultures are poor. Trust and co-operation, enforced by a strong and universal rule of law, is the ultimate basis of the wealth of wealthy nations.
I might have been inclined to agree with you. However, circle back 500 years, when India was immensely more wealthy than western nations. Does your logic still hold true? Read books such as “Guns, Germs and Steel” for a more rational explanation for the wealth of nations.
This has been an issue in Indonesia also for several years.
As Ondrej said it before, students here in Europe have been using it for years, as received calls are free of charge (which I think makes sense). Here in Finland students will give missed calls to their parents to signal “call me”, or friends “I’m waiting for you here where we were supposed to meet, where are you?”, “Come online on facebook/skype” and so on.
This has been used in Lebanon since 1997. People have a dictionary of what they want to say with missed calls. 1mc = Get ready, 2mcs = I am here to pick you up, 3 mcs = …
This is very interesting phenomenon to implement in India. Missed call is culture in India b’coz most of the people are middle class who can’t lavishly spend on mobile. More over they use mobile for only to carry information..
1. People maintain 2 SIMs, in case one of the operator’a network is not efficient at particular point of time. These networks malfunction quite often.
2. Missed call is generally used to confirm already reached understanding i. e. I reached, come down, come on cam, ring when free and so on.
3. This is used as free SMS, only if the recipient and sender have prior understanding.
A great “missed call” App is installed by the school buses in my kids school – the system uses GPS to locate the bus and gives “missed call” 10 minutes before arrival at pickup call.
They used SMS – but government has put in restrictions on number of SMSes that can be sent (to curb the tele-marketeers, so missed call system is in use! Works better than SMS!
In Spain they use that as a way of communication, too. Calling and then hanging up means ‘I’m on my way’ or ‘call me’ or a myriad of things, depending on the situation.
They do this all the time in west africa as well. They call it flashing.
sorry RG and physical – india’s saving grace is that it is not the USA – pray tell me how is it not entrepreneurial? or for that that matter, less greedy and unethical like those hotshot financial cowboys who have and continue to selfdestruct taking down many others with them?
personally, as an australian i take my hat off to the indians – they never fail to teach us that there are many ways to skin a cat and never forget that this is an ancient civilisation, perhaps the most ancient, that brought an end to european colonisation without firing a shot – they didn’t have guns
This is no news at all. No news at all. All these things have been happening in Africa and never made headlines. Please carry out some more research and you will see that you are behind with this so called invention by close to a decade!