A local firm funded by investors including Creative Technology co-founder Sim Wong Hoo has debuted a mobile app that provides free Internet calls to landlines and mobile phones.
The nanu app, which was launched yesterday for Android phones, was developed by Gentay Communications. The apps for iPhones and other devices will be launched later this year.
The service allows free calls via the Internet, including to people who do not have the app, but users will have to listen to an advertisement while waiting for the other party to answer.
For the first million users, their free calls made to landlines and to non-nanu mobile users will be limited to 15 minutes. As soon as enough advertising revenue rolls in, all nanu calls to landlines and non-nanu mobile users will be free. Users can call more than 70 countries.
Gentay, which started developing nanu 18 months ago, did not disclose the amount Mr Sim and others invested.
Mr Sim told The Straits Times that the timing is right for Internet telephony. "By providing free outgoing calls for customers for the first time, Gentay's nanu technology is a game-changer," he said. "I believe we have a winner here because (the) technology is unique, scalable and solid."
Mr Sim said he has been investing in Internet telephony firms since the early days of the Internet in the 1990s as he "personally believed in their game-changing nature".
In 2000, he and other venture capitalists pumped US$115.5 million (S$144 million) into InnoMedia, an Internet telephony start- up founded by Creative co-founder Ng Kai Wa. Other investors then included Vertex Management and EDB Investments.
Gentay co-founder and chief executive Martin Nygate told The Straits Times: "The fresh funds are sufficient for us to further develop the product for quite a while without having to raise additional funds.
"We'll also use the funds for marketing efforts in our target markets of Indonesia and the Philippines."
He said the short advertisement that will play over the ring tone while a call is waiting to be picked up is key to the app's key feature. "The revenue from the advertisement will subsidise the cost of the call so that consumers can make all calls completely free," he added.
The app can be used wherever there is an Internet connection.
The difference between nanu and other Internet phone services such as Skype and Viber is that it uses ultra-low bandwidth technology that allows it to provide quality calls, the company said.
This means that even when the network connection is 2G - such as when a user is in a lift, a moving car or a remote location - the call will be clear and made without lag.
Gentay hopes to shake up the telco industry, which has been charging high roaming rates for calls for years, said Mr Nygate.
The company, which employs nine programmers, is mainly focused on providing ship-to-shore communications, but Mr Nygate discovered that such calls using the Internet via satellite were not good enough.
"In low bandwidths, Skype and other similar services don't work too well. Hence, we decided to develop nanu."
Forrester Research senior analyst Clement Teo said the concept of transferring to advertisers the costs of making phone calls is an interesting business model.
A caller may be willing to sit through 10 seconds of an advertisement just to get free calls, he said.
One concern is that consumers must know who to go to for support when they experience dropped or unclear calls.
Another challenge is airing the right advertisement.
"A shampoo ad to a rural farmer may be appropriate but certainly not one selling a luxury car. So the app must also have good analytics to match advertiser with caller so that the appropriate commercial is played," said Mr Teo.