A conversation leading to a recent deal between two Waterloo tech neighbours didn’t start on Albert Street or the Communitech Hub.

It began as a chance encounter in Barcelona, Spain. The irony isn’t lost on the parties involved.

“People in Waterloo think nothing about jumping on an airplane and flying down to meet a potential partner or customer in Silicon Valley or anywhere around the world,’’ Sandvine CEO Dave Caputo said in an interview. “Sometimes we should look in our own backyard . . . Maybe talk in a bar about how to get more business done with each other.”

Sandvine and TextNow announced last Thursday that the cloud-based phone service TextNow provides in the U.S. will flow through Sandvine’s Network Policy Control platform.

Launched in 2001, Sandvine is a publicly traded leader in the management of data moving across fixed and mobile networks. It employs more than 700 people on Albert Street in Waterloo and offices around the world, including Bangalore, India, and Rotterdam, the Netherlands.

TextNow started out in 2009 as Enflick, a project launched by Derek Ting and Jon Lerner when they were students at the University of Waterloo. Based in Waterloo with a branch in San Francisco, TextNow provides U.S. mobile-phone users with cloud-based text, voice and data options at a lower cost than classic cellular service.

It has a staff of about 80 between the two locations, and is growing quickly.

“Sandvine helps us be more efficient,” said Ting, TextNow’s CEO. "We don’t want users to have to do a lot of tinkering around with their phones to optimize their data usage. We just do it for them . . . Sandvine (technology) lets us do that.”

TextNow adds its own firmware to Android phones it sells to U.S. customers, enabling them to use wi-fi as their primary means of mobile communication. Most people have wi-fi at work or at home — places where they spend the greatest share of their time.

With cellular service relegated to a backup role, customers save money.

TextNow, shut out of the mobile-service market in Canada, has more than six million monthly users south of the border. Sprint provides TextNow’s cellular default when wi-fi isn’t available.

The layering of Sandvine and TextNow systems will broaden the range of service options available to customers, Ting said.

"There may be other ways to leverage the technology to come up with more creative, more affordable plans,” he said. "This is the opportunity to open that door.”

Caputo was at the Mobile World Congress in Barcelona in February when he saw a familiar face in a corridor.

“I said, 'Hey, Derek, what are you doing here?’ ’’ Caputo said. "He told me about a problem he was trying to solve, and I said, ‘We could do that for you in a much simpler way.’ ”

Caputo said he had some knowledge of TextNow, but didn’t realize the company’s depth of expertise in mobile virtual networks.

“What we love about this is, one, it showcases innovation here in Waterloo Region,” he said. “Two, everybody wants more competition among mobile data service providers.

“These guys have figured out a super-low-cost way of being a mobile virtual network operator. They don’t own the antennae. They don’t own the radio-access network. But they can deliver service in a very inexpensive way.”

In Waterloo, the two companies are separated by less than a kilometre — Sandvine on Albert Street and TextNow in the David Johnston Research + Technology Park.

Ting said it is ironic that it took an accidental meeting in Barcelona to bring their respective teams together at home in Waterloo.

Local companies should do more to support each other, Caputo said, pointing out the relationship aerial-drone-maker Aeryon Labs has with Dejero, which provides cloud-based management and distribution of live video.

It makes local businesses “more sophisticated and innovative,” he said.

“I wonder if we do enough of that. Maybe this should be another example to celebrate.”