Mobile Data

A Startup That Lets You Pay for Wireless Data With Time


A Startup That Lets You Pay for Wireless Data With Time

Photograph by Getty Images

This morning marks the official launch of Aquto, a Boston-based startup with a novel business plan. The company allows wireless customers to pay for data—video downloads, streaming music, Google (GOOG) searches, what have you?—by watching advertisements, taking surveys, downloading apps, or otherwise devoting their time to a brand. Watching a 30-second ad via the Aquto app, for example, might get you 5 or 10 megabytes, says Aquto founder and Chief Executive Officer Susie Kim Riley—enough to download a few photos or check a full inbox.

It’s an intriguing option for customers, who, until now, have had only three options when they hit their limits: Curtail use, pay overage charges, or upgrade their plan. With Aquto (say ah-koo-toe), customers can use their earned data right away or bank it for lean times. Text messages from their carriers alert them to credits, which will also appear as line items on the monthly bill.

Aquto, which has raised $8 million in venture funding, also plans to reach customers through mobile ads. Someone listening to Pandora (P) on an iPhone (AAPL), for instance, might tap on a banner ad and then see an offer to get data in exchange for watching a video. The point, from the advertiser’s perspective, is to increase the chance of engagement by dangling data as a reward. Aquto gets paid by the advertisers—via mobile ad agencies and networks—and either buys data in bulk from wireless providers or shares revenue with them. For now, the service is limited to Vodafone (VOD) customers in Portugal. Next month, says Riley, Acuto will roll it out in the U.S. with a “very large carrier.”

The startup is part of a larger experiment in which a third party—neither the wireless company nor the customer—pays for mobile data. In May, there were rumblings that ESPN (DIS) might pay to cover wireless customers as long as they are consuming ESPN content. Riley naturally predicts that content providers can’t afford to pay for data use on a large scale. But by bringing in advertisers, Aquto creates new revenue without adding to the dollar cost for content providers or for customers.

“If you have more time than money, by all means watch the ads,” says Roger Entner, founder of Recon Analytics, which tracks the telecom industry. “If you have more money than time, skip the ads.” Virgin Mobile, Entner notes, tried a similar approach with voice customers years ago through a partner called Sugar Mama that allowed customers to pay for minutes by watching ads. Advertisers, he says, just need to be aware of what kind of customer they are likely to reach. “Here you are certainly getting people that are more money-constrained than they are time-constrained,” he says. That implies college kids, young singles, anyone spending their money on themselves and spending a lot of time on the Web. “This would probably not be a good medium to advertise a Mercedes (DAI:GR),” says Entner.

Boudway_190
Boudway is a reporter for Bloomberg Businessweek in New York.

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