27 January 2016
by Paul Smith

Aussie start-up Unlockd signs on with Sprint, Twitter and Yahoo in global push


Unlockd CEO and co-founder Matt Berriman has relocated to New York to drive its global expansion.

Lachlan Murdoch-backed Australian telecommunications and advertising technology start-up Unlockd has expanded into the US, signing a potentially lucrative deal with one of the country's largest mobile providers Sprint Telecom, including advertising partnerships with Twitter and Yahoo.

The deal will make Unlockd's mobile platform initially available to more than 9 million US customers of Sprint's Boost Mobile brand, as it tries to establish a new business model, where customers can reduce or even remove their mobile bills by watching ads.

The US deal comes after Unlockd made its first move towards changing the way consumers pay their mobile bills in Australia late last year, with Lebara Mobile. Customers are given the option to periodically view advertisements and special deals when they unlock their phone.

The company is financially backed by an impressive array of well-known media and business figures including Lachlan Murdoch, Peter Gammell, Margaret Jackson and Catch of the Day founders Hezi and Gabby Leibovich.


Matt Berriman with Unlockd investors Gabby Leibovich, Andrew Walsh and Hezi Leibovich.

Company co-founder and chief executive Matt Berriman has relocated from Melbourne to New York to set up Unlockd's US operation, and told The Australian Financial Review that it represented the first global expansion of a busy 2016.

After Australia and the US, a London office will open in six weeks, and Mr Berriman said the company's technology will be available in more than six international markets by the end of 2016. The company is currently in negotiations with 16 international telcos, and has already signed a deal with a UK player, which cannot yet be publicly announced.

SIGNIFICANT DEAL
The Boost deal in the US is much more significant in scale than the Lebara deal in Australia, as its 9 million subscribers is roughly the same number that Optus has in Australia. Depending on the success of its initial offering, it is possible that Sprint will extend Unlockd's technology across other parts of its 58 million US customers.

"We feel it is stage one of a longer relationship, as we think this is changing the face of telecom providers and giving them new revenue streams , while driving down consumer prices without affecting their ARPUs [average revenue per user]," Mr Berriman said.

"Every telco in every market so far has asked for exclusivity, which shows us that they view this option as a way of differentiating themselves from other providers. Here in the US all the telcos are competing with very similar bundles, and confusing consumers with claims about speeds and network coverage, this gives them something of value that is different."

As part of the deal Unlockd has brought Twitter and Yahoo on board. A Yahoo search bar will be added to the unlock screen of Boost users' phones and special deals and offers will be made available to Twitter users, through its digital ad marketplace MoPub.

​As part of its global expansion plans Unlockd has expanded from 10 employees at launch to about 50. Despite relocating to the US personally, Mr Berriman said technology and research and development would continue to be run out of Australia.

SOLVING AD-BLOCK PROBLEMS
The emergence of Unlockd comes at a time when tensions have been emerging in the booming mobile advertising market between telcos and media and content providers.

In its marketing material Unlockd quotes figures from analyst firm eMarketer, which estimates that global mobile advertising spending is expected to surpass $US100 billion ($144 billion) in 2016. Most of this revenue has gone to the media companies, leaving telcos angry that they are missing out.

As a result some telcos have spoken about plans to begin using ad-blocking software, such as a product developed by Israeli startup Shine, if they don't receive a share of ad revenue. The software would make most forms of advertising invisible on the mobile devices.

Mr Berriman said he had spoken with a number of telcos that had been in negotiations with Shine, who expressed relief that Unlockd was offering a reasonable option to create value for both sides.

"The telcos don't really want to play this antagonistic game, and we are showing them that it is possible to bring the likes of Yahoo and Twitter on board with a model that also benefits them," he said.

"Shine and other ad-blocking businesses are basically getting the telcos to hold the media companies hostage by blocking their ads, we are offering a win/win situation."