Mobile Messaging Startup UppTalk Evolves Into A Low Cost Cell Service With Launch Of UppWireless In U.S.

Mobile messaging app startup UppTalk (a rebrand from its prior name Yuilop) is evolving — and rather than following the social platform playbook of plenty of over-the-top (OTT) messaging players (such as Line, KakaoTalk and WeChat), it’s taking aim at carriers by offering a mobile phone service that undercuts current costly U.S. carrier pricing.

UppWireless, as the offering launching in the U.S. today is called, is an all-IP SIM-based mobile phone service. Being all-IP, means UppTalk can keep costs down — allowing it to tout this wireless package as the lowest price on the market, and to focus on what it says users care most about now: data.

“By unboundling mobile data from carrier voice and text we allow the user to get the best deal,” is how UppTalk founder and CEO Jochen Doppelhammer puts it.

How low? $15 per month for 1GB of data at 4G speeds, plus unlimited talk and texts (via its OTT service) within the U.S. and Canada. Or unlimited data starting from $35 per month.

UppWireless piggybacks on T-Mobile’s 4G network, making it a quasi-MVNO at least.

“In some way we’re an MVNO, but the key difference is that everything we’re doing is IP based, no cellular minutes or SMS,” Doppelhammer tells TechCrunch.

“We’re 100% cloud-based service platform. This allows a completely different service offering and of course pricing strategy, e.g. calls & texts to any US & Canada phone number are free, unlimited! The user basically just chooses the data plans that fits best his needs.

“This caters specifically to the target segments that primarily want to use their apps on their smartphones and only secondarily use their phone to talk & text, which probably by now is the majority of the smartphone users.”

Doppelhammer claims there is currently no other offering in the U.S. that provides “anything closely as attractive” to what UppWireless is offering. Which sounds about right, judging by how much my U.S. TC colleagues moans about the cost of their cell packages. Although rival wireless carrier startup FreedomPop has been in touch to disagree — touting its own carrier disrupting sub-$5 per month offering.

(UppTalk’s Doppelhammer counters those claims by dubbing FreedomPop’s pricing confusing and pointing out that their sub-$5 promo offer only includes 500MB of data, and requires users to pay for two years’ service up front to get that low price.)

Relative carrier coverage (e.g. T-Mobile’s 4G network coverage vs AT&T’s or Sprint’s) is another issue to consider. FreedomPop runs over Sprint and Clear networks.

“All MVNOs and MNOs offer you expensive bundles with lots of carrier minutes & texts and very little data… exactly the opposite of what people actually want,” Doppelhammer adds.

Yuilop (as it then was) launched back in 2011 as a free mobile messaging app with 1 million Euros in seed funding from Nauta Capital.

Its approach to mobile messaging was always a bit different to major rivals in the space — with an architecture built on open standards, allowing its service to interoperate with federated OTT services such as Google Talk, and also with mobile numbers, meaning the service could still be used to freely call and SMS other non-Yuilop users — i.e. rather than requiring everyone to join a walled garden to chat.

However Yuilop/UppTalk uses a slightly complex virtual currency model for when users are talking to non-Yuilop/UppTalk users, based around generating what it calls “energy” credits.

That added layer has probably held it back from the rampant growth seen by others in the mobile messaging category that have taken a more simplistic approach to FREE — by requiring that users badger their friends to download the app and stay within the app to be able to chat for nothing. (UppTalk’s virtual currency “energy credits” do come into play in UppWireless for certain international calls, although some destinations are free.)

This time last year Yuilop would only say it had “millions” of users in 40+ countries. Compare that to veteran of the space WhatsApp which, at last count, said it has some 430 million monthly active users. So clearly more than a rebrand of a tricky to pronounce name (Yuliop –> UppTalk) was required.

UppTalk is thus attempting to differentiate afresh in the messaging space by going after a target everyone loves to hate (carriers) — and one with stale pricing structures that are ripe for disruption — rather than continuing to just play second fiddle to mobile messaging platform behemoths.

“You could call it a pivot away from messaging per se,” says Doppelhammer. “But I think we’ve done that actually from day one by integrating ourselves with the telecom world and offering SMS and calls to landlines. I’d say it’s a consequent evolution of the path we’ve started with Upptalk to become a next-gen, cloud-based (app) communication and internet access service.”

“We’re not competing with WeChat and Line for the mobile platform in the Facebook way, which is what they do,” he adds. “I’d say we’re complementing WhatsApp, WeChat and Line. We love apps! And we want to provide just the best experience using the apps and services they prefer rather than forcing them to use carrier services.”

UppTalk still wants to be a platform in the sense of a technology platform for other apps, MVNOs and MNOs to build their services on top of. But it’s not trying to recreate Facebook via social messaging.

“We have already started to publish SDKs to the open source community so they can build apps/services upon our platform,” adds Doppelhammer.

UppTalk is intending to launch its quasi MVNO offering in Europe too — although it’s focusing initially on the U.S. market, owing to the carrier dynamics being more ripe for disruption. Here in Europe it still thinks there’s room to under-cut MVNOs by using its mobile messaging app as a cross-selling opportunity to on-ramp users to its mobile phone service.

“In Europe we’ll adapt the pricing as retail prices and cost are way lower than in the U.S., which is still a very operator dominated, expensive market,” he says. “But again, our technology and operational model of being 100% IP-based and operated fully in the cloud allows us to a) offer a next-gen cloud-based, multi-device, app-based service and b) operate on way lower cost and margins than existing.

“The  mobile-app led acquisition model is another advantage over traditional MNOs/MVNOs.
Typically MVNOs innovated in the go-to-market model, e.g. first to sell SIM-only online. Today MNOs do that as well and cost of user acquisition is quite high.

“Based on our mobile app UppTalk we generate a rapidly growing user base that is exactly the target for our MVNO offering at almost zero cost. So this mobile app led go-to-market model is another differentiating advantage over the traditional MVNO/MNO model. We’re again changing the way the game is played. No customer acquisition cost that need to be re-financed.”