Rebtel serves immigrant communities with service that links the web to the traditional phone network– after free internet calling felled its business two years ago
BE2C2 Report — The Swedish company Rebtel Networks AB is focusing on immigrants in the U.S. seeking to stay in touch with their families abroad. Started two years back, Rebtel says it’s business plan is profitable and expects sales this year to increase more than 20 percent, to $95 million.
For $2 to $12 per month, users get unlimited calls to places such as China, India, Pakistan and Mexico. On one end is a FaceTime-like calling app. On the other, Rebtel connects to the local network to reach any fixed or mobile number. “Traditional phone companies typically haven’t built their services with this target group in mind,” says Magnus Larsson, who initiated the change when he took over as Rebtel’s chief executive officer two years ago according to Bloomberg.
The business model is significant. Rebtel has tapped into those same immigrant communities to create an army of ambassadors, who earn commissions of up to $21 per customer they bring in. These 10,000-plus salespeople can more easily reach members of groups such as Miami’s 1.2 million Cubans or Houston’s 150,000 Nigerians. While the average salesperson earns about $100 a week, some take home thousands monthly. “When you land in a new country, you have a number of basic needs—food, housing, the ability to communicate with family back home,” Larsson says. “Quite soon, you’re also looking to earn a living, and we offer that.”
Miguel Lara, an Ecuadorean immigrant to Miami, found Rebtel about six months ago through a Facebook ad. He mans a red Rebtel bus plying the streets of Little Havana that’s offered free calls home since Hurricane Irma. By passing out his card to everyone he meets, he says, he earns about $1,000 a week. “I’m never standing still,” he says. “I can manage my own time and work the hours I want.”
International calling, once hugely profitable, has been undermined by free voice apps—but those require both callers to be connected to the internet– a business plan of voice service followed by Facebook, WhatsApp, and Apple’s FaceTime require internet connectivity on both ends. Since that’s difficult or impossible in many developing and underdeveloped countries, Rebtel contracts with local phone companies to complete calls from customers in the U.S. or Europe.
According to the report, Rebtel offers free calls between people with the app, and it lets users in many countries ring the U.S. for free, betting that some of those on the receiving end will become customers. Last year the company started selling phone and data credits for Cuba that émigrés can send home for use by relatives or friends, a first step into the vast remittances market. “Rebtel has built a strong brand in first- and second-generation immigrant communities around the world, making it well-positioned to extend their offering beyond calling,” says Ben Holmes, a partner at Index Ventures, a Rebtel backer that’s also invested in BlaBlaCar, Dropbox, and Facebook.
Rebtel has 80 employees at its headquarters in the Swedish capital and sales offices in Florida and Texas.