The brainchild of Hyderabad-based SMSCountry Networks Pvt. Ltd., 160by2 was launched following widespread demand from consumers as well as advertisers.
'On one side were users who wanted free SMS and on the other side were brands and media companies trying to reach these consumers. Initially we ignored them but as the number increased, we realised that there was a genuine opportunity here, waiting to be exploited,' said Satya Kalyan Yerramsetti, CEO, SMSCountry Networks Pvt. Ltd.
For sending an SMS from 160by2.com, one needs to only fill up a simple registration form.
The name '160by2' was based on the concept that users can send free SMS of up to 80 characters while the remaining 80 would be utilised by advertisers, with both sides getting to use half of the mobile screen.
'The advertiser pays for the SMSs that are sent from the users to another mobile user. Thus every free SMS used by the user is subsidised by the advertiser,' Yerramsetti told IANS.
'There is a specific thing called the 'Ad Serve' engine, which intelligently understands what ad to be tagged into each user-generated SMS based on advertiser requirement and accordingly prices the advertisements,' he explained.
For example, one of the firm's clients, McDonald's, wanted to promote its delivery number in Mumbai. Thus every SMS that was being sent in Mumbai during the general lunchtime hours carried an ad stating: 'Get a free McShake, call our toll-free number.'
'We haven't yet monetised our website that has about 600,000 page views every day but we see a huge potential in monetising and offering contextual advertising,' he said.
The company has sales offices in Mumbai, Delhi and Bangalore. It has run campaigns for almost 15 brands such as Cadbury, GSK, McDonald's, Kingfisher Airlines, Jet airways and Force India F1 among others.
It is also keen to service the local retail market and is working in association with various media planning agencies such as Madison and Starcom IP.
'Our idea is to make SMS free for everyone in the country and every free SMS will carry an appropriate ad in it. So we are talking to a couple of telecom operators such as Airtel and Idea Cellular to offer SMS to their subscribers completely free and we will serve ads into the messages,' Yerramsetti averred.
It plans to start this initially in a few big circles and eventually roll out on a pan-India basis.
'As a pilot we might work in a couple of circles and when the operators see a huge revenue potential we will roll out across circles.'
160by2.com has over 450,000 registered users with the registrations growing at 30-40 percent month on month.
'We reached about 1.5 million mobiles in the month of February 2008 and served ads in about 60 percent of those SMS. About 30 percent of our recipient base is registered with 160by2,' he said.
Mobile advertising in India is still in a nascent stage offering huge potential waiting to be tapped.
'Today we see a few start-ups trying out different models but we do not look at them as competition. No one really understands the consumer needs and behaviour on this medium,' highlighted Yerramsetti.
'Hence, for us the competition is basically from global advertising giants like Google, Yahoo and MSN who are looking at entering the mobile advertising space. There are also the global mobile operators like Vodafone, T-mobile, who with their dwindling ARPUs (average revenue per users) want to get into future money-spinners like advertising on mobiles.'
It also has plans to serves ads into third-party mobile content providers like news, cricket, horoscope and stock alerts among others.