Israeli startup Onavo aims to save mobile subscribers money on their data plans by shrinking the data they download.
The company's app, which launched in April on Apple iOS and is expected soon for Android, promises to help subscribers squeeze more information and entertainment out of a given number of downloaded bits. It may grow increasingly relevant in the U.S., where mobile operators are now phasing out unlimited data plans, but there are two major limitations on the tool right now: It can't compress video or Internet voice calls yet.
Onavo operates a cloud-based service that intercepts data headed for a user's smartphone and compresses it using specialized algorithms, said co-founder and CEO Guy Rosen. The service can reduce the amount of data a user consumes by as much as 80 percent, depending on the application and other factors, the company claims. Onavo has applied for patents on the compression algorithms it uses, Rosen said.
The approach is similar to that used by Opera, the mobile browser provider that uses a proxy server to compress websites. Onavo extends that concept to apps and plans to become an "Opera for everything," Rosen said. Apart from currently excluding video and VoIP (voice over Internet Protocol), the service can handle all types of data except encrypted bits, which in most cases are just the packets exchanged during login sessions for various apps such as Facebook, he said. When new mobile apps become popular, the company tunes its software to deal with those specific apps.
However, where Opera has focused on improving browser performance, Onavo is taking direct aim at phone bills, especially for international roaming.
"The point is really to help people save money," Rosen said.
The Onavo app and service currently are free as an introductory offer, but the company plans later to start charging a per-month fee for its compression service. Rosen expects that cost to be less than $10 per month, but the price will probably vary according to the customer's situation, such as whether they use international roaming. The monthly fee has to remain lower than the likely phone-bill savings to make sense, he said.
Other features built in to Onavo, such as a dashboard that shows the user what apps on the phone are consuming the most data, are likely to remain free, Rosen said.
Onavo may be good news to U.S. smartphone users, who have seen unlimited data plans gradually replaced by per-megabit offerings over the past few years. Earlier this month, Verizon discontinued its unlimited plans in favor of metered offerings that start at $30 per month for 2GB of data. It followed AT&T, which now offers plans to new subscribers starting at $15 per month for 200MB of data. Both carriers let users buy more megabytes if needed, and they allow existing subscribers on unlimited plans to keep those deals.
However, most consumers aren't fazed by Verizon's new limited plans, according to a survey by Consumer Reports magazine. It found that the average user consumes no more than 500MB per month. International roaming, for which per-megabit rates often are much higher than for regular domestic use, can present a bigger case for Onavo's service, Rosen said.
Rather than trying to stop Onavo, carriers are interested in the company's service, according to Rosen. He said Onavo has talked with mobile operators in North America, Europe and Asia about using Onavo.
"Initially, we thought they'd have it in for us, obviously, but it's a lot more complicated than that," he said. Carriers want to both offer better pricing for data roaming and reduce the number of bits going over their domestic networks.
For its cloud infrastructure, Onavo is using Amazon EC2 because it had to go to a third party to scale up fast enough to keep up with demand, Rosen said. Without detailing how much capacity Onavo is using on EC2, he said the company has so far saved its users more 9 million megabytes of data through its compression service.
"Essentially, we can scale indefinitely, and we're not seeing any limits at this point," Rosen said. "What we do would not be possible for a startup without the cloud."
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