OTT player Pinger, Deutsche Telekom play nice on texting initiatives
BARCELONA, Spain--Over-the-top texting apps and carriers often butt heads, as these apps can seriously cut into carrier revenues gained through texting plans. Despite this, OTT client Pinger has found a friend and investor in Deutsche Telekom and its CEO René Obermann.
This isn't the only time Deutsche Telekom has experimented with OTT options. In 2011 the company's T-Mobile USA subsidiary launched Bobsled, a free way for users to make calls from mobile or desktop via Facebook.
The US-based Pinger also provides free texting and calling services through its series of apps and expanded internationally to Canada and Spain last fall. The service works by assigning each device a new local number that friends can contact directly.
"We are now of a mind where we're all going to embrace OTT," said Pinger Chief Marketing Officer Terrence Sweeney in an interview at Mobile World Congress. He cited a recent comScore story that said Pinger was downloaded to 21 percent of all iOS devices including the iPod touch, iPad and iPhone. The OTT texting space is becoming more and more relevant as analysts predict that SMS, once a major cash cow for carriers, is slowly being replaced by free options. Device makers such as Apple (NASDAQ:AAPL) and Blackberry (NASDAQ:BBRY) have iMessage and BBM, which allow free messaging to other iPhone or Blackberry users respectively. In addition, mobile social companies like Facebook and Skype have released their own texting and voice apps that use data rather than voice minutes or texts. "The amount of data for text messages is insignificant," assured Sweeney. He added that for voice the consumption is a little more but still not considerable.
Sweeney admitted that in the U.S., "economically most people that have a carrier plan do not have an incentive" to download an OTT app, since most carriers offer large or unlimited texting plans. However, he noted that it does have an advantage as a cheaper way to reach contacts internationally.
What makes Pinger interesting is that the service is able to turn a non-phone into a phone. For example, a user with an iPod touch can download the app and receive a free number to make and receive calls and texts with in areas with Wi-Fi. Sweeney has also seen that users purchase prepaid phones and after the minutes expire, switch to a Pinger number.
Sweeney said Pinger's apps are mostly free, with some monetization coming in through in-app purchases for additional features but mostly through mobile advertising through 24 different ad networks including Millennial Media (NYSE:MM) and Google's (NASDAQ:GOOG) AdMob .
The OTT app market is fiercely competitive. Sweeney said that East Asian markets are dominated by local companies, while "WhatsApp is strong everywhere else. We're strong in the U.S." He added that Pinger has 12 million monthly active users in the U.S. "There are no barriers to switching [to another texting app] so when we mess around with pricing, usage and downloads are going to drop through the roof."
Sweeney said users can expect more announcements in the next 60-90 days.
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