What Is the 'Missed Call' Market and Why Does Twitter Want In?

President Obama's State of the Union address announced that the long national nightmare of financial crisis and recession are finally over. That will no doubt come as something of a surprise to those who remain un or under employed, but whatever.

Rest assured that there are still markets where saving money counts. Like most of the rest of the world outside New York, San Francisco and Washington. And given the ginormous role phones play in our lives - and the growing expense that using them optimally entails, it makes sense that there would be numerous novel ways in which entrepreneurs would attempt to make a business out of helping people save money while using new apps or services that put money in someone else's pocket besides the telecoms.

Skype and magicJack were among the first to use the internet to evade phone charges, but now technology has become even more subtle. Using missed calls as a means to avoid costs while connecting other services is already a huge market. That Twitter is hoping to find some other ways of generating revenue beyond selling ads in an already crowded and uncertain market makes strategic sense.

Whether it can capitalize on disintermediation of big telecoms is but one question. The larger one is whether such initiatives will simply end up disintermediating themselves out of existence as the telecoms turn their considerable resources to countering the threat. JL

Mathew Ingram reports in GigaOm:

65 percent of India’s 860 million mobile-phone users prefer the hangup to a quick call. It has developed into a kind of Morse code that is used for a wide variety of services.Users will call phones and then hang up, triggering a missed call notification without paying. 
On Monday, Twitter announced that it is acquiring an India-based company called ZipDial for an undisclosed amount — reportedly about $30 million, according to Bloomberg — and it was interesting to watch everyone try to figure out what the company does. ZipDial describes itself as a “marketing and engagement” service, but what does that mean? Anyone who has experience with emerging markets like India knows: ZipDial is part of the giant “missed call” market.

Those of us who live in North America or Europe may not be as familiar with this phenomenon as users in developing countries, because we assume everyone has relatively cheap access to data plans and smartphones and therefore uses Twitter and other services via the apps on their phone. But that’s not the case in plenty of other places.

Also known as flashing

In a nutshell, users in relatively low-income countries who want to notify their friends of something or just get their attention will call their phones and then hang up, triggering a missed-call notification. In Africa, the practice is known as “flashing,” and in Latin America it’s called “sinpa,” which is short for “without paying” (this kind of behavior also occurs outside of developing countries, where users are on fixed-cost phone plans, but it’s much more common in emerging markets).What companies like ZipDial do is use this kind of behavior as a way of triggering other services or features, in much the same way that a notification service like Yo can be connected to other services. So users of ZipDial can get access to coupons and other offers from various companies by leaving a missed call to a specific number, and they can even trigger free app downloads and other services.
One survey found that as many as 65 percent of India’s 860 million mobile-phone users prefer the hangup to a quick call. According to a feature on the phenomenon in The Economist, it has developed into a kind of Morse code that is used for a wide variety of services — roadside tea vendors even accept dropped calls from nearby customers as a prompt for service, and users can even employ a missed call notification to get an update on their bank balance.

Cricket and Bollywood

ZipDial’s service apparently got a huge boost in India in 2011 when the service relayed cricket scores via text message to users who called a specific number and then hung up. On a single day, when India played its rival Pakistan, the service got 4 million calls. The company also got involved in a national anti-corruption campaign led by an Indian politician, in which callers were asked to ZipDial a number to show support: the campaign got 4.5 million calls, compared to just 36,000 Facebook likes and 1,450 tweets.
ZipDial and Twitter have worked together a number of times before, including one partnership that offered users access to tweets from Bollywood celebrities such as Shah Rukh Khan and Amitabh Bachchan if they called a specific number. And during the 2014 elections, Twitter also gave users access to tweets from the official accounts of the major parties.
As Twitter tries to grow beyond the 230 million users it currently has, developing markets like India are bound to be a much larger focus, and ZipDial provides an easy way to get the social network into the hands of even relatively low-income users in India and in other countries such as Indonesia and Brazil. It also gives Twitter more advertising clout, since ZipDial has worked with dozens of leading brands such as Disney and Pepsi.