21/01/2015 8:53 PM IST | Updated 15/07/2016 8:24 AM IST

Why Twitter Acquired An Indian Start-Up That Turned Missed Calls Into Gold

Sriram Sharma

Twitter yesterday said it would acquire ZipDial, a Bangalore-based mobile startup for an undisclosed sum. This is the first such deal by Twitter in India, and reflects the importance of gaining more users in emerging markets as user growth slows in the United States.

For companies such as Twitter and Facebook, who have spent recent years perfecting their mobile experience, emerging economies like India represent a challenge because a large number of mobile phones are feature phones, without internet connectivity. And even when users own smartphones, they often don't subscribe to data or consume very little data.

Twitter is likely viewing ZipDial as a bridge across the data divide.

ZipDial allows users to receive content on their phones for free by placing a so-called 'missed call' to companies. With ZipDial, the calls are automatically disconnected after one ring. Companies then send them free text messages, including advertisements or other content such as contests, sports scores or giveaways.

In a bandwidth-starved country, where mobile users typically download 60 MB of data per month, compared with over 1 GB for users in the United States, this method of marketing has worked well. Many users cannot afford data access or choose to use it only for messaging on apps such as Whatsapp or Viber, which consume small amounts of data.

“We want to make Twitter even more accessible to people around the world. Over the next several years, billions of people will come online for the first time in countries like Brazil, India and Indonesia.” said Rishi Jaitly, Twitter’s market director for India and Southeast Asia, in an email response to HuffPost India.

With this acquisition, Twitter is clearly aiming at not just India but other emerging markets, such as Brazil, with similar trends of connectivity and data usage. It makes sense, because the company's user base in the United States is maturing and growth is being driven by countries such as India and Indonesia. Twitter will also want to catch up quickly with rival Facebook, which has a user base of 112 million in India, according to figures quoted last month. Twitter has 284 million monthly active users as of Q3 2014, and 77 percent of its user base is based outside of the US. The company does not reveal user figures for India.

India’s internet user base is set to cross 300 million users, according to recent IAMAI (Internet and Mobile Association of India) data. Analysts peg the user base at a much more conservative figure of 120-130 million.

Twitter will utilize ZipDial’s technology to reach out to every Indian with a mobile phone even if they are not connected to the internet, as is mostly the case. As ZipDial’s blog points out, Indians are frugal when it comes to internet usage, consuming data on an average about 5% of what a typical American user consumes.

"Twitter, in partnership with ZipDial, can make great content more accessible to everyone."

“For many, their first online experience will be on a mobile device – but the cost of data may prevent them from experiencing the true power of the Internet. Twitter, in partnership with ZipDial, can make great content more accessible to everyone,” Jaitly said.

ZipDial has worked with Twitter before. Its Twitter Fast Follow feature lets users follow Twitter handles from a basic feature phone by giving a missed call. Tweets are delivered via SMS free of charge; this feature has been used by celebrities, brands and agencies. During the 2014 national elections, both the Bharatiya Janata Party and Congress worked with Twitter and ZipDial to make sure their handles were accessible to a wide audience, including millions who do not have smartphones. Companies such as Disney and Procter & Gamble have used ZipDial as part of their marketing efforts.

“Over the last two years we’ve collaborated on a variety of campaigns, including the Indian elections, Bollywood film promotions and @MTVIndia’s #RockTheVote “Dial the Hashtag” campaign. In recent years, iconic actors like @iamsrk, @SrBachchan and @SuperStarRajini, religious leaders like @SriSri and many others partnered with Twitter and ZipDial so Indian users could follow them on Twitter,” said Valerie Wagoner, an American who founded the Bangalore-headquartered company in 2010 after working at eBay and M-Check.

Zipdial will continue to exist as a separate brand, till the foreseeable future, said Wagoner. “My co-founder Amiya Pathak and I will report to Twitter’s product team and work closely with Twitter’s teams in emerging markets.” she told HuffPost India.

“The ZipDial platform will be integrated into the core Twitter platform to further enrich the end-to-end user lifecycle and experience.” Jaitly said.

Zipdial has achieved more than one billion connections with over 500 brands across 60 million users. “Our innovations have led to award-winning work with the world’s leading brands across South Asia, Southeast Asia and Africa.” Wagoner added.