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article imageSatisfying the craving for data by giving it away Special

By Les Horvitz     Dec 9, 2015 in Technology
New York - Nathan Eagle found his calling in Kenya thanks to a combination of blood and money (not what you think). The result is an Internet platform that gives millions access to the Internet without making them poorer.
Eagle, who has appointments at Harvard and MIT,was spending a year as a Fulbright professor in Kenya when a nurse approached him to give blood for an emergency transfusion. After being solicited for blood on a number of occasions, he began to investigate why rural hospitals kept running out of blood. He discovered that deliveries of blood occurred only every two weeks; what’s more, there wasn’t any way of determining the available supply. He hit upon a solution: recruit nurses in hospitals and clinics to report daily levels of blood in their facilities to a central blood bank. He even programmed an SMS system for this purpose. The system worked for a week or two and then the nurses stopped reporting. He realized that every time a nurse texted him it cost her money. “It was like cutting her pay.” As a temporary solution, Eagle paid the data costs for the nurses out of his own pocket, but then decided to write a program for the carrier’s billing system that would pay the nurses 10 Kenyan shillings (about 10 cents) for each report. They soon resumed submitting their reports.
Falling costs of smartphones has made it possible for more people in the developing world to connect to the Internet — arguably, Android adoption has been the fastest growing technology in history — but what good does it do to have a smartphone if you can’t use it to do more than text and make calls? “They’re using smartphones like dumb phones,” Eagle said.
As Eagle quickly learned, the price of connectivity in many emerging countries can represent from 5 to 8 percent of a day’s wages. In Indonesia, an average worker has to work 10 hours a week to afford a 1 gig data plan. In India it’s 20 hours and in Brazil an astonishing 30 hours which translates to about 10 percent of a Brazilian’s average weekly paycheck. At those rates, even the middle class is being priced out of the market. That means that in India, for example, only 57 percent of smartphone owners even turn on their data and those who do consume only 80 MB monthly — about a tenth of what Americans use. The hunger for data, though, continues unabated; give people a WiFi hot spot and people will flock to it and start downloading.
That’s where Jana comes in. Founded in 2006, Eagle’s platform is intended to bring free Internet to millions of mobile subscribers. It’s proven to be such a success that by the end of 2017 it may connect as many as a billion people.
Tapping that next billion potential consumers explains why an entrepreneur like Nathan Eagle was one of the principal speakers at a recent Quartz conference in New York entitled "The Next Billion."
Jana can actually make money by giving away free data using mCent, which Eagle describes as an "opt-in mobile network" that pays users to fill out consumer surveys and try products. With mCent, users can obtain credits if they click on certain apps: try out WeChat, for example, and you’ll receive 150 mg credit. Customers are rewarded with data for trying apps for Twitter, Amazon, Facebook and Tencent (a Chinese Internet service portal) if they use them for more than a week. Indian users of mCent receive 13 rupees’ worth of mobile data if they download and use a chat app called LINE or 28 rupees’ worth for using a music service called Saavn. The companies pay for the data and Jana takes a cut. Users can also earn credits by choosing from a list of tasks — answer questions about a new software release and claim your free megabytes.
Jana doesn’t limit its giveaways to the phone. Credits can be applied in the physical world. "In the Philippines, if you go out and buy a particular brand of candy bar, if you get three of your friends to also buy it, all of you get it for 50 percent off," Eagle says. "We can validate the purchase because 7-Eleven is now printing Jana IDs on every receipt they have.” Buy two or more Danone yogurt products in Indonesia and come away with 5,000 rupiahs ($0.52) worth of data credits. Free airtime is available to Indians who buy a bottle of shampoo and redeem a code printed on the packaging.
Credits can even be transferred. Run out of ideas of what to give a friend who has everything: why not a 200 mg credit?
“Sponsored data is absolutely one of the tools that operators in emerging markets need to drive up data consumption,” says Phil Kendall, a Strategy Analytics analyst.
It’s paid off for Jana which now boasts an annual revenue of $50 billion, up from only a few hundred thousand dollars in its first year of operation.
Not surprisingly, behemoths like Facebook and Google are vying for the same billion consumers that Jana is trying to reach. Facebook has launched a well-publicized initiative — called Internet.org — but to date it has only managed to sign up a third as many users as Jana. Google’s Project Loon plans to broadcast free Wi-Fi to users from high-altitude balloons or drones, but it’s still in the testing phase. (Facebook’s counterpart is Aquila, a high-altitude, long-endurance aircraft designed in the UK.) There are also local competitors like Bandtone in South Africa, which also offer mobile-phone credits in promotional campaigns.
There are potential problems with the Jana model. Some observers raise privacy issues. After all, the company has to track the apps and products a consumer uses in order to bestow its credits. Eagle understands the concerns but points out that while Jana acquires information on what people are looking at “we don’t know what the content is.” That’s to say, Jana will know that a user is accessing Amazon but it has no idea what he or she is doing on the Amazon site. Nor does Eagle feel that mCent ‘s model is an infringement of Net neutrality — where no company or carrier is able to favor the delivery of one site’s content over another’s — because mCent only requires a user to try a sponsored app to obtain credits. Once they have their free megabytes they are free to access any website, watch any video or download any app they care to. Some critics also warn that users of mCent may be at risk when they download apps they have no interest in simply to get more free data. “We’ve seen a lot of games that have integrated providers who will show you an ad for another game,” says Neil Rimer of Index Ventures, a skeptic of Janus’ model.
“Ultimately,” Eagle says, “the value proposition is free connectivity and that is universally appealing. Across cultures and across continents, people want to spend less money on their phone bill.”
More about Internet connectivity, Mobile apps, mCent, Nathan Eagle, wechat
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