Don’t pick up! The rise and fall of a massive industry based on missed calls

In the age of expensive data, missed calls became more than just a cheap way to communicate. But in India, technology moves faster than you’d think.

By ATUL BHATTARAI | Rest of World

n 2003, Praveen Kumar bought his first mobile phone, as several of his friends already had. But for the 29-year-old schoolteacher from the eastern state of Bihar, one of India’s poorest, to use the device to talk to his friends was inadvisable. “It was very costly,” Kumar says. Each outgoing minute was charged about eight cents, so a 10-minute call cost about as much as the average daily wage at the time. “We didn’t have enough money to say everything on the phone.”

So Kumar’s friends and family members began ringing each other but hanging up before being charged for a call; the resulting missed-call alerts functioned as a kind of code between them. “It was decided in advance,” Kumar says. “We would say, if I’m coming to pick you up, I’ll give you a missed call, and you come out of your house.”

Leaving missed calls in this way — effectively using a mobile phone as a kind of latter-day pager — was a consumer hack that, in the 2000s, before India’s cheap smartphone and data revolution, grew more popular than texting. The missed call emerged in India as a critical means of communication for those who counted every rupee spent on recharge credit. But the practice soon spread, became trendy, and, even as call rates plunged in the 2000s to among the lowest in the world, evolved into a general tool of convenience: a missed call could mean “I miss you,” “Call me back,” or “I’m here.” The fact that the missed call demanded only basic numeric literacy made them accessible to the third of India’s population that was illiterate. In 2008, one study estimated that more than half of Indian phone users were in the habit of calling people with the expectation that they wouldn’t pick up.

Then, just as the missed call became ubiquitous — The Times of India wrote in 2009 of Indians’ marked fondness “for hanging up swiftly” — a company in Bangalore called ZipDial took the tool and transformed it. With a couple of rings to the appropriate ZipDial hotline, customers received automated texts and callbacks that delivered live cricket scores for a big match, a deal on an affordable shampoo, rudimentary on-demand radio for Bollywood songs, or celebrity tweets — content supplied by brands that were struggling to reach offline consumers. In exchange, companies learned about their customers’ preferences and created viral offline marketing campaigns for their products.

At a time when less than a tenth of India’s population was online — smartphones were prohibitively expensive, and buying a gigabyte of mobile data, which was glitchy and agonizingly slow outside of major cities, cost the average rural Indian two to three days’ wages — missed calls made information from an otherwise unreachable digital world available with a single dial. Users needed only a feature phone: the kind with a number pad, preloaded with a game of Snake. “For many people, ZipDial was the first connection to the internet,” says Sanjay Swamy, one of the company’s founders and board members.

With the frantic pace of technological change over the past five years, the internet pay wall in India has largely come down. Budget smartphones and dirt-cheap data rates have ensured that half of Indians are online. And missed calls are just about obsolete, their function better served by WhatsApp, YouTube, Facebook, Twitter, and a welter of e-commerce apps.

ZipDial eventually went the way of the missed calls themselves. The company’s founders anticipated from the beginning that the usefulness of their tool would be outpaced by rapid tech advancements in India. But between 2010, when it launched, and 2016, when it ceased operations, it managed to accumulate 60 million unique users and, at its peak, was servicing over 5 million calls a day. The story of ZipDial — and missed calls — demonstrates not only the speed of change in India but how businesses can try to balance looking after the needs of today’s customers with the inevitable technological advances of tomorrow.

Sanjay Swamy, an entrepreneur, venture capitalist, and one of ZipDial’s founders, at his home in Bangalore.
Sanjay Swamy, an entrepreneur, venture capitalist, and one of ZipDial’s founders, at his home in Bangalore. Selvaprakash Lakshmanan for Rest of World

The idea of repurposing missed calls for commercial gain came to Swamy, an entrepreneur and venture capitalist, and his colleague Valerie Wagoner in 2009, during a late-night flight from Delhi to Bangalore. Wagoner, an ambitious ex-eBay employee, had moved to Bangalore from California the previous year to work at mChek, a mobile payments startup headed by Swamy. On the flight, the two were discussing the difficulty of monitoring consumer behavior in India, where over 95% of purchases were made offline and in cash, when they realized there was one method they had overlooked. Many Indian customers were already in the habit of texting “short codes” to advertised numbers to receive offers and information from brands. “It struck me that you could do the exact same thing through a missed call,” Swamy said.

The two soon involved Amiya Pathak, a software engineer who would become ZipDial’s third co-founder. Within a week, Pathak had built a system for linking callers in the offline world to a back end connected to the internet. It was beguilingly simple: a customer would call a hotline, the phone would ring twice and automatically disconnect, and the system would reply within seconds with dynamic content, such as match scores, through a call or texts.

“The beauty of the missed-call behavior was that it was already pervasive,” said Wagoner, who became the company’s CEO. It had become so commonplace as to vex the country’s telecom operators: missed calls clogged up over 30% of phone lines but generated no revenue. 

Most encouraging for ZipDial’s business prospects was that its potential user base was rapidly expanding. India was in the midst of its first mobile phone boom. In five years, from 2006 to 2011, the number of mobile subscriptions had soared from 166 million to nearly 894 million, according to the World Bank — over two-thirds of the country’s population at the time. “People would have mobile phones before they would have bank accounts,” Wagoner said.

It was beguilingly simple: a customer would call a hotline, the phone would ring twice and automatically disconnect, and the system would reply within seconds with dynamic content, such as match scores, through a call or texts.

As a test run for the tool, the three co-founders set up a service during the 2010 FIFA World Cup in South Africa to provide updated match scores over text in response to a missed call. It worked smoothly, if inconspicuously, until, one day, the team forgot to update scores, and repeat users flooded them with complaints. “We were kind of doing it as a hobby until then,” Swamy recalled. “We said, my goodness, people actually depend on this service!”

During the 2011 ICC Cricket World Cup, one of the world’s biggest cricket tournaments, ZipDial broke into the mass market. As in the previous year, Swamy, Wagoner, and Pathak set up a service to update callers about match scores. “It just took off like crazy,” Wagoner says. During the first match, ZipDial ended up processing over 4 million calls in a day.

ZipDial soon fashioned itself to conduct lead-generating marketing campaigns, in which customers would dial the missed-call hotline featured alongside a product on a billboard or TV ad. “Ultimately, at ZipDial, we were trying to solve the offline-to-online connection,” Wagoner says, “to be able to connect customers to the things that they cared about, be that content or products.” That model found success in 2011 with Gillette, ZipDial’s first big customer, with whom it tracked the recipients of 1 million free razor samples in over 10 cities. Over the next two years, ZipDial accrued more than 400 clients, including a parade of Fortune 500 companies like Pepsi, Procter & Gamble, and Disney.

ZipDial’s campaigns easily outperformed social media at the time. By 2013, Gillette had accumulated 2.4 million subscribers through ZipDial, surpassing its 1.63 million Facebook likes. Disney used the platform to reach 2 million subscribers, over 90% of whom didn’t have a Facebook account or mobile internet; incredibly, these subscribers engaged about 13 times per month on average, a figure that would have been unprecedented in developed markets.

Missed calls swiftly replaced SMS-only campaigns as the marketing tool of choice for big brands in India. Noting ZipDial’s success, a number of telecommunications firms, such as VivaConnect and Ozonetel, added missed-call campaigns to their own repertoire, starting in 2010. Between mid-2012 and early 2013, ZipDial’s revenue shot up sixfold, and India’s Economic Times estimated that the missed-call industry was worth 5 billion rupees in total — around $94 million.

The missed call proved to be an astonishingly versatile tool. Patents filed by ZipDial in 2012 and 2015 envision a range of scenarios for its use, some of which, such as missed calls to switch credit cards on and off or exchange business cards between two callers, would remain largely aspirational. Others, such as missed calls to vote for reality show contestants, were realized by ZipDial and its competitors across a number of marketing campaigns.

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