NEW DELHI: Directi has launched an app, Ringo, which allows users to make overseas calls without the Internet, Wi-Fi or carrier minutes at rates that it claims are about 70% lower than those offered by mobile phone companies and creditbased calls over Skype or Viber. The model could well disrupt India's market for overseas calls, where an estimated $2 billion is spent annually, said Directi founder Bhavin Turakhia.
The charges for making international calls through the app will be comparable to local call prices. Making a call to the US via Ringo will cost about Rs 1.08 a minute, while Skype charges about Rs 1.45 and telecom companies charge Rs 8, the serial entrepreneur said. Once a caller downloads Ringo, which is available on Android and iOS app stores, and makes an international call, the app dials out a local call to the user in India and another local call to the overseas user and connects the two over reliable carriers.
Turakhia said the Mumbaibased company has entered into partnerships with local and foreign carriers through aggregators, where they buy carrier minutes and pay interconnect charges for calls that terminate on the telcos' networks. "We add a little on top of the interconnect charges," he said, when asked about the profitability model at Rs 1.08 a minute for outgoing calls to the US, China, the UK and Canada. Call rates to Singapore, Thailand and Malaysia are Rs 2.69 a minute.
Just like using a pre-paid mobile connection, a caller can add cash for making international calls via net banking, debit or credit cards. The charges don't get deducted from the pre-paid mobile balance. The money or calling credits in the app stay valid for a year. "It's disruptive, but not as much as it would have been some years back. Now, we have many options to call internationally," Jaideep Ghosh, a partner at KPMG India who tracks the telecom sector, said, highlighting free calls available through Viber and Skype.
"It can work well for pre-paid users. I feel telcos need to reconsider conventional calling." The app launch comes amid a debate on whether telecom operators can seek a share of the revenue from companies such as Facebook, Google, Whatsapp and others that use their networks to transmit voice and data. "For casual users, the service will fly.
But for the serious business user, its use remains questionable," said Sanchit Vir Gogia, founder CEO at Greyhound Research. "Also, whether they will be able to guarantee voice quality when volumes peak is another matter." Turakhia aims for the app to become the worldwide leader in this space within five years. At present, the app is available in 16 countries with over 170,000 users.
Directi, which started by offering web-hosting services in 1999-2000, today owns a group of businesses including domain name registrar BigRock, tech solutionsBSE -5.00 % arm LogicBoxes and free SMS and group chat provider Talk.To. In January last year, Nasdaq-listed Endurance International Group acquired the web business of Directi for over $100 million.