10/02/2013 12:37 pm ET Updated Dec 02, 2013

This Startup Created A Game-Changer For Developing Countries


By Ben Thurman, Dowser

London-based startup Movirtu is rethinking SIM cards. Why carry around various SIM cards for multiple phones? Movirtu has created a "virtual" SIM card that gives users in developing countries access to multiple numbers from a single device. We speak with CEO of Movirtu, Carsten Brinkschulte, about Movirtu's strides to redesign mobile communications.

What enticed you about this particular company? In a way it's an extension of what you were doing.

It's the same space. It's not exactly what I've been doing before, but it's addressing a similar geographic target.

What really excited me about Movirtu is that they have quite a revolutionary technology that can be applied to developing and developed markets: the virtual SIM card platform. It can be applied to entry-level services, like Movirtu's share, where we enable users that can't afford a phone to get mobile identity. The very same technology can also be applied to high-end markets, where we are enabling enterprises to provide mobile numbers on personally-owned smart phones. I liked the approach, it's not a one-trick pony, but it can be applied to a wide range of solutions.

In terms of the actual innovation, has it changed since Nigel founded it? Have there been additions that have been made to the innovation itself?

The core functionality is basically still the same and that is to disconnect the mobile phone number from the SIM card. Traditionally there is a one-to-one relationship between a mobile phone number and the SIM card, and what Movirtu's SIM platform does is it disconnects the mobile phone number from the SIM card and then it enables more flexible management of that, so we can attach multiple numbers to the same SIM card or we can have the same number on multiple SIM cards.
So it is flexibility that we are adding and that hasn't changed. The traditional history of the company and to a great extent what we are doing now is focused very much on emerging markets where we are enabling phone sharing with that technology. We've also found additional use cases of the same technology in developed markets and in emerging markets but higher up to the more valuable customers as well.

Can you speak a bit about Movirtu Share and how it caters to developing markets?

Movirtu Share enables users that cannot afford a physical phone to get a mobile identity. They get what we call a virtual SIM card. They will get their mobile number, just like a normal SIM card has a mobile number.

That virtual SIM card has it has its own voice mail - it is in fact a real mobile number, but it doesn't need a physical phone. Users buy a plastic card, like a credit card, with their mobile number printed on them, and they can of course give that number to their friends and family and contacts. When they actually want to make a phone call or access their voice mail or messaging, they can take someone else's mobile phone - any mobile phone - and temporarily activate their mobile number on that donor or borrowed phone.

From the borrowed phone, they can send and receive messages, access their voice mail, as well as receive phone calls. After they have used the phone, they deactivate the number and give it back to whoever owns the phone. This is especially ideal for Africa or parts of Asia, where you still have a very large group of individuals who have a very low income, as low as $2 a day. It's hard for them to actually purchase and maintain a mobile.

Where can people use this technology right now?

That's Movirtu Share, it's in live operation in outer Madagascar, and it is currently being rolled out to other subsidiaries. We also have contracts with other mobile operators in Africa on this product.

Airtel has approximately sixteen subsidiaries across Africa and they selected Madagascar as the pilot. So we deployed and launched in Madagascar. We learned important lessons from that launch - how to price it, how to market it, how to advertise it, what customers want, how they use it - and then we adjusted together with Airtel the way it is priced and the way it is offered.

The second product is Movirtu ManyMe. ManyMe takes the same virtual SIM platform but enables users that have a more capable mobile phone, to have multiple mobile numbers on the same phone.

Can you use the same handsets or do you need to get specialized handsets?

No you don't need a special handset or a new SIM card. The Movirtu solutions work on any handset, and on both entry-level phones as well as smart phones. What Movirtu ManyMe allows you to do is to have multiple identities active at the same time on a single handset.

Who are your competitors?

I think the biggest competition we are seeing is from voice-over IP and from the top players who are trying to offer additional numbers or virtual numbers completely decoupled from the mobile network. But these are using Voice over IP, not the mobile voice network. Rather, it's using the mobile data network to actually transport your voice.

But there's limits to that in emerging markets, because of smart phones and Internet connectivity...

It's not practical in emerging markets at all because using voice for data means you are going to use substantial amounts of data traffic to transport your voice, which is costly.

What excites and intrigues you in terms of mobile innovation right now?

What I find really intriguing working in emerging markets is that you can have a huge impact on people's lives, a far larger impact than to merely provide yet another application that does something funny or interesting. You can enhance people's lives in a big way. Through mobile innovation, you may be able to transform their prospects of getting a job, progressing in life, and even help entire regions at one time.

There is this idealistic aspect of being able to change peoples lives. At the same time, it's also possible to do this profitably. Movirtu is not a charity. We want to make money and we are making money. But we can do good at the same time and that, I think, is exciting.

Even though you just came on board recently, what do you think has been the greatest challenge in the Movirtu story so far?

I think the greatest challenge is scale. Movirtu is still a small company, yet we have a solution, or three solutions, that can be applied on a global level. We're a company with just under 50 employees, yet there are about 800 or 900 mobile operators worldwide and ideally you would like to speak to all of them at the same time, which we can't. So I think that the greatest challenge is to have visibility, because as a small company it's difficult to get noticed. That is the real challenge that we're facing: to get this company to scale from a pilot, from a technology perspective, into a profitable, fast-growing, ideally global business.

Do you have a timeline for that? How long will it take until you're able to make profit?

That's a very good question - I have a board meeting tomorrow and I'm sure I'll be asked that question again! That depends on how aggressive we are on the expansion side to be honest. We could become profitable relatively quickly.

You also have two other projects that are designed for the developed markets - ManyMe and WorkLife. What do those offer - same concept but different markets?

ManyMe is offered to the individual, to the end user, whereas WorkLife is offered to the enterprise. So, yes, they are different markets and different pricing strategies. ManyMe is not going to bring in massive additional revenue and therefore wouldn't cost as much. This is intended to enable the user to have multiple identities from the same carrier. So we would imagine that, although the pricing is something the carrier would do, a carrier in the US or Europe to charge a one-time fee for the activation of the number, but not necessarily a recurring fee for maintaining the number. The advantage for the carrier is that you will have multiple identities with the same carrier, so your relationship with the carrier will intensify, and because it's more intensive you're less likely to leave. WorkLife is a solution for the enterprise to have multiple numbers.

In terms of the innovation and doing this in emerging markets, what's been the biggest lesson?

As with any service that is new and innovative, you can't predict how the service will be used, how it should be priced and how it should be marketed best, because it is something new.

We've learned simple lessons, such as to make the ID cards plastic, not paper, because it rains a lot in Madagascar.
The solution used to be sold as a separate product, whereas now the virtual plastic SIM cards are being sold just like normal SIM cards. These are important lessons in how to position it, how to market it, how to price it, and how to distribute it. These are not necessarily core lessons, but very important for the success of the solution.

This post originally appeared on Dowser.

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