Technology, Culture, Commentary on the Internet Revolution

U Mobile Launches First Ad-Supported Cellular Service in Asia

by Mike Abundo on May 21st, 2008

Philippine cellco U Mobile just launched the first ad-supported cellular service in Asia. That means everything about the service — voice, SMS, MMS, GPRS, 3G — is (at least partly) paid for by advertisers.

The 411

You must be 15-35 to sign up. That seems to be the demographic most desired by Philippine mobile advertisers.

You need an invitation from a current subscriber to sign up. Current subscribers can invite only ten friends. This makes sense for three reasons: scalability, snob appeal, viral marketing, and value to advertisers (networked customers are more valuable).

You need to fill out a long, long, looooong survey form when you sign up, and every year after that. The form requires lots and lots and looooots of personal information. This is the only form of ad targeting U Mobile claims to have at the moment. If you’re privacy-conscious, U Mobile is definitely not for you.

Ad views translate directly into prepaid credit, but only up to a certain limit. If you need any more prepaid credit, you need to get it the old-fashioned way: buy it. Prepaid credit sales could actually serve as a safety net for U Mobile during lean ad months.

You get PhP100 (~$2.50) of free prepaid credit every month for the first six months. That may not sound like much, but cellular service is cheap in the Philippines (voice ~$0.20/min., SMS ~$0.03/msg., data $0.50/hr.).

You can change numbers at any time. Unfortunately, all the cool numbers seem to be taken already. Yes, I tried 666 6666.

Who Else Does This?

UK startup Blyk has been seeing considerable success with an ad-supported cellular service model. Blyk sends each subscriber up to six MMS ads a day, which means they require MMS phones. I expect U Mobile to do something similar, but they might throw in voice and SMS ads just to get more inclusive (or intrusive, depending on how cynical you are about advertising).

The Philippines sends more SMS than all of Europe combined; even Filipino sidewalk vendors have cellphones. It’s the perfect place to replicate Blyk’s success in Asia.

A Smart Move

U Mobile is the brainchild of Philippine startup Connectivity Unlimited Resource Enterprise (CURE), which was recently acquired by top Philippine telco Smart for $10 million. That means U Mobile uses the same network as the Philippines’ top telco. Advertisers under negotiation include Pepsi and Philippine mall chain SM.

Interestingly enough, Smart acquired CURE on the same day Blyk announced 100,000 subscribers. Indeed it is smart to buy into a business model the moment you see evidence of it working.

So Will I Use It?

I’ve been testing the service since Tuesday. Except for sporadic problems receiving calls, it seems every bit as stable as regular Smart service. The biggest problem I’ve encountered is that non-Smart/U Mobile subscribers can’t see my number when I call them. U Mobile is aware of this issue; they say they’re working on it.

Jayvee Fernandez provides a mobile industry analyst’s perspective on U Mobile, noting that they’re doing what Google’s been trying to do since last year. Karla Redor notes U Mobile’s marketing tie-up with mobile VoIP client Fring, which chat-happy Filipinos might actually use.

I don’t have to see ads to get free service until May 31. I’m a very heavy 3G user, so the idea of advertisers subsidizing my (huge) phone bill actually appeals to me. If U Mobile fixes the aforementioned call problems, if the ads aren’t too annoying, and if the ad-supported credit cap isn’t too low, I just might make my U Mobile my primary Philippine cellco. At least, until I turn 35.

(Disclosure: I won an LG KU380 at the U Mobile launch event raffle Monday night. I’ve been testing U Mobile on that unit. If I decide to make U Mobile my primary Philippine cellco, however, their SIM is moving straight to my Nokia N95.)

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POSTED IN: Advertising, Mobile