Mark Bridge writes:

The idea of a free mobile phone network is a dream for many consumers – and potentially a nightmare for traditional mobile operators. Most notably we saw Blyk launch an ad-funded network in the UK five years ago, with the MVNO closing in 2009 as the company’s business model changed.

In this week’s podcast feature I’ve been talking to someone who’s just launched a brand new mobile service that’s giving away calls, text messages and data in return for advertising. The company is Ovivo Mobile, it launched last month and it’s currently targeting students to sign up.

The founder and CEO of Ovivo Mobile is Dariush Zand, so I called him at his London office and started by asking the obvious question: what exactly is Ovivo Mobile?

“We are a new mobile virtual network operator within the UK. Simplifying what we do into one phrase, we are an ad-funded mobile virtual network operator. We give our customers free usage every month and, in return, we deliver targeted and non-intrusive advertising onto their mobile devices when they browse the mobile internet.”

Everything appears to have been thought through very carefully, including the company name and Ovivo Mobile’s intriguing ‘rhinoceros-on-an-ibis’ logo.

Dariush explained some of the thinking behind the name. “It’s a consolidation of various different things. The free element of our service, the free usage we give our customers each month and the freedom from contracts, the freedom from commitments, is why you see a lot of emphasis on the ‘O’ in our name, Ovivo. The Latin word ‘via’ being road – to freedom – hence why ‘vi’ is in there. And it’s a palindrome, so it looks good in print. It sounds good when you say it.”

“A lot of people have asked ‘why did you choose such a logo?’ Well, there was a very, very sharp chap thirty years ago, he decided to put a half-eaten piece of fruit on a computer and called it the Macintosh. And he did pretty well for himself out of creating that brand promise, which is exactly what we're trying to do. There is a message behind the logo as well, which is all about achieving up until now what is thought to be impossible. Hence, the flipping of a rhino on a head of an ibis.”

Ovivo Mobile has launched with a smartphone tariff that gives customers 100 minutes of standard UK calls and 100 text messages free every month, along with a 10MB daily data allowance. ’Out of bundle’ usage is charged at 6p per minute, 6p per SMS text and 6p per megabyte. There’s also a tablet data-only alternative of 15MB per day.

Customers pay £20 to join, which includes £15 of credit. There are no ongoing costs and, as long as customers use their phone at least once a month, the service will remain active.

When it comes to the advertising that keeps the service free, Dariush is keen to point out that Ovivo Mobile won’t be bombarding its customers with SMS or MMS-based advertising. “It's perceived as spam”, he insists. “It interrupts customers using their phone. It's not where we want to be and it's not what we're doing. What we do is quite simple and straightforward. Whenever one of our customers opens the browser on their mobile device, they are taken through to an Ovivo Mobile homepage. And that portal homepage is where we display targeted contextual advertising from our ad network partners.”

Setting up a virtual network has become easier in recent years due to the appearance of MVNAs; mobile virtual network aggregators that act as a kind of ‘host’ between the wholesale network – which is Vodafone for Ovivo Mobile – and the virtual network.

I asked about this split between in-house activity and outsourced support.

“The costs of becoming an MVNO are substantially lower than they were in the past. You don't have to invest in massive billing systems and provisioning systems. You don't have to invest in massive CRM systems. Through our strategic partner, Cognatel, we've managed to do that with much lower barriers to entry. Not to underestimate the effort that it takes to launch an MVNO by any means whatsoever; it's not a half-a-day job, it's not a walk in the park and you do need to have the right additional partners on the marketing side, on the operations side, on the customer care side to ultimately piece that altogether.”

Ovivo Mobile’s ad-serving platform is being provided by Moben International, while its customer care is being handled by MPL Contact.

“Operationally though, from a financial perspective and from a general business governance and admin perspective, it is all held in-house within Ovivo.”

It would be easy to think of Blyk as being the ‘elephant in the room’ when it came to any conversation about Ovivo Mobile. That’s clearly not the case, because Dariush introduced the subject before I had a chance.

“I think the principle behind Blyk was absolutely spot-on. It's the same principle that my business is based upon. It's that we can make money out of mobile advertising to an extent that we can offer core phone service free as a result of that. The challenge that I believe Blyk faced in 2006 was that they were operating in a market didn't exist at that particular point in time. In 2009, mobile advertising spend in the UK was only roughly around 90 to 95 million pounds. The market has moved on substantially from there. We have ad networks like Adfonic, InMobi, Google AdSense, Blis and Linking Mobile, partners of Ovivo Mobile, sitting on lots and lots of relevant good-quality content.”

“Through our partnerships we've been able to tap into that content. As a result it means we do not have to acquire massive amounts of customers to be able to sell our advertising space to potential advertisers. We can monetise right from the start.”

And with around half a million new students expected to join UK colleges and universities this year, along with the 2½ million registered students already in higher education, Ovivo Mobile has plenty of opportunities ahead.