How Aquto plans to turn mobile ads into free megabytes on your data plan

If we haven’t already become it, we’re turning into a nation of rationers when it comes to mobile data. As long as mobile apps keep getting more data hungry and mobile data prices remain high, we’re going to have to count our megabytes, ensuring we have enough bits left in our plans to watch that next YouTube video or upload that latest batch of photos to social media.
Unless you happen to be on one of Sprint(s s) or T-Mobile’s(s tmus) unlimited plans, you’re probably already starting to look at your data allowances as a kind of bank account and your individual megabytes a type of currency. Why not take that concept to its logical conclusion? A new startup called Aquto wants to turn the megabyte into the mobile internet’s equivalent of a frequent flier mile.
Susie Kim Riley, Aquto CEOFounded in 2012 by telecom veteran Susie Kim Riley, the Boston-based Aquto has been quietly working to bring mobile operators together with ad networks and other internet marketers to create a consumer rewards system which deals in data. The idea is consumers would watch ads, download and try out apps or otherwise engage with companies in exchange for a top-off to their mobile data buckets, Riley said.
Getting someone else besides subscribers to pay for mobile data has been a holy grail for mobile operators. AT&T(s t), Verizon(s vz) and Sprint have all talked up the idea of toll-free data, where content providers pay the mobile data bills for their own traffic, allowing mobile users to their consume their content with no restrictions. Meanwhile the internet players have gone the opposite direction, often designing their apps with little regard to the amount of data they consume.
Kickbit screenshot AqutoRiley said she believes that those two industries fundamentally misunderstand each other’s business models. YouTube(s goog) can’t pay the mobile freight for its customers because its advertising-based business model simply can’t make room for such an expense, she said. Meanwhile, carriers will never build the wild-wild-west mobile internet that Silicon Valley wants.
Aquto is trying to bridge those differences in worldview by adopting a currency both sides can relate to, the megabyte, Riley said. Aquto had developed an app called Kickbit with Vodafone(s vod) that allows customers to earn data credits in exchange for engaging with Android apps. For instance, you can rack up 536 megabytes if you download and sign up for Hulu’s free trial. (Virtual operator FreedomPop is experimenting with similar ideas.)
That’s stage one, Riley said. Eventually she wants to turn your phone number into a kind of loyalty account number, which customers can use to earn data independently of Aquto’s apps. Present your account number when you fill out a questionnaire, sign up for an email newsletter or watch a video, and you get 50 MB credited to your data cap. One day, Riley envisions being able to get megabytes instead of miles or points when staying at a hotel, renting a car or even signing up for a carrier-branded vanity credit card. “The analogy is very close to that of frequent flier program,” she said.
Aquto is officially coming out of stealth this week, though it has already drawn some attention when it raised an $8 million Series A round last year from North Bridge Venture Partners and Matrix Partners.
Riley’s background is steeped in the inner workings of the carrier’s networks. Riley founded Camiant, a company specializing in the complex policy and signaling engines that dictate the kinds of services individual subscribers received on the network and communicated that information across the network. In 2010 Tekelec bought Camiant for $130 million, and earlier this year Oracle(s orcl) bought Tekelec largely for Camiant’s technology, which is now in dozens of operators’ networks. If anyone understands how carriers are running their mobile data businesses, it’s probably Riley.