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Sunday, September 11, 2011

Roaming for less

Onavo co-founders Guy Rosen (l.) and Roi Tiger

Onavo co-founders Guy Rosen (l.) and Roi Tiger

Israeli startup Onavo aims to reduce your cell phone charges when you're on the road - and maybe your radiation exposure, too.

Do you download music and other multimedia files to your iPhone while on the road? How about looking up an address via Google Maps when traveling overseas? If so, you could be in for a surprisingly large cell phone bill, as all those data downloads add up fast. 

An Israeli startup thinks it has a better way. By signing up for the free iPhone or Android app from Onavo, you could save up to 75 percent on your data plan, the company says. That's because Onavo compresses your data - everything from web browsing to checking Facebook - before it gets to your phone.

The service also benefits cell phone providers, whose wireless networks can't handle thousands of subscribers all pulling up the same YouTube video at once.

Onavo's vision has attracted both kudos and big money. The influential blog TechCrunch called it "a must-have app for any and every iPhone user on a data plan." Magma Venture Partners and Sequoia Capital invested $3 million in the company in May.

Born of frustration

Many smart phone owners have heard the apocryphal story of the little old lady from Pasadena who went traveling in Europe. She used her cell phone and, upon her return, was walloped with a $60,000 bill for roaming charges.

The numbers may be exaggerated, but the story is absolutely true, says Dvir Reznik, Onavo's vice president of marketing. It happened to Onavo's founders. CEO Guy Rosen was so frustrated with his phone charges after a trip to the Mobile World Congress in Barcelona in February last year that he joined forces with Roi Tiger, his former colleague from cellular phone startup Modu, to make sure it wouldn't happen again. Their free Onavo app launched at the end of April 2011.

Onavo is targeting the roaming market first, since that's where the pain point is greatest - especially for Israelis. Reznik's data shows that Israelis pay $15.15 per megabyte for cellular data while roaming, well above the global average of $9.48.

But Onavo's service is equally valuable in one's home country. In North America, for example, subscribers receive an average of only a few hundred megabytes of download a month. The days of unlimited data plans are, sadly, long gone. Since going above your plan's limit quickly becomes costly, Onavo comes to the rescue. 

The app has some pretty complex back-end technology. It actually redirects data traffic from the websites and online services you visit. The data is then compressed on the Onavo servers before it's sent on its way to your phone. "From the user's perspective, nothing has changed," explains Reznik. "Once you've installed it, it's all 'tap and forget.' "

The data is hosted on Amazon's cloud storage service, which has proven to be pretty stable. But even if it goes down, your phone's traffic will continue as always, albeit temporarily without the money-saving compression.

Another advantage of Onavo is radiation reduction. In cities packed with skyscrapers, and hence poor reception, the most radiation occurs when the phone is trying extra hard to make a connection to a cellular tower. Reduce the amount of data and the phone can chill a bit more.

Fast-growing reach

Onavo's app currently supports more than 260 cellular operators in some 95 countries, with more being added every day, Reznik says. While it's not necessary to cut a deal with each provider, the company is nevertheless in active discussions with many of these companies around the world. Why? Because if customers get socked with massive bills roaming, next time they travel, they'll either turn off the data plan or buy a local SIM card. "That's the last thing an operator wants," Reznik explains, given that text messages have been replaced by data packages as the cash cows for providers.

Plus, a separate reporting tool gives users the ability to see which apps consume the most data for specific time periods. For example, a user might not realize how data-intensive, hence expensive, it is to download music away from a home or work WiFi network. The reporting tool allows operators to "educate" their users to avoid those data bottlenecks.

Reznik notes that this functionality never before existed for the entire Apple platform, including both iPhone and iPad, which Onavo also supports.

Although the reporting tool will probably always be available at no cost, Reznik says, the compression piece will eventually be subscription based - either "by a weekly or monthly package, or a certain amount of megabytes purchased for a specified period of time." Onavo's sales pitch is that the amount you save will always be greater than the subscription plan's cost.
The Onavo app has been downloaded "hundreds of thousands of times in just the first two months since its launch," Reznik reports. It is currently available for iPhone versions 3G and up as well as Android.