Is WhatsApp calling a threat to mobile telecom companies?

WhatsApp is estimated to have over had 700 million users. Its growth rate puts it on track to surpass 1 billion users by the end of 2015.

A CLOUD of uncertainty is gathering over mobile network operators’ voice model as they face a new threat from mobile messaging service WhatsApp which is now offering voice calling.
Although some local telecommunications companies said the coming of the new facility was not a threat, players in the sector across the world have stated they were beginning to feel the presence of new facility.
The country’s biggest mobile telecommunication companies with about nine million subscribers said they were not worried about the new communication facility.
“Econet does not see new technologies such as WhatsApp calling and others as a threat. We, in fact, see it as an opportunity to offer new possibilities for our customers. As we have stated before, this trend from traditional income streams such as voice is something that Econet had long anticipated,” said the company in a statement.
“This is why we then took a strategic decision to invest in data services and many other innovative overlay services. It is a strategy that is already bearing fruit for the company and for our customers,” said Econet.
However, NetOne the country second largest mobile telecommunication company by subscribers at 2,8 million was quoted in the media recently bemoaning the benefits that services WhatsApp receive by riding on mobile networks for free and eating into the MNOs revenues in the process.
Airtime dealers could also be affected with WhatsApp calling as people would capitalize on WhatsApp calling to buying recharge cards.
The headache for mobile telecommunication operators does not end there though. There is also the challenge of lower revenue that was caused by lowering of tariffs late last year which has affected their revenues
Some industry experts think that after introducing voice calling, the company may venture into video calling, something messaging app SnapChat is already experimenting with.
WhatsApp Calling uses an internet connection rather than one’s mobile phone’s voice minutes, like Skype, FaceTime Audio or Viber. The new calling feature had been expected to come to the app after Facebook took over WhatsApp last year.
According to figures from the Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz) voice calling declined for the year to December 2014.
In December last year traffic for on-net voice calls (calls on the same network) amounted declined by 1,8 percent to 1,071 billion minutes from 1, 67 billion minutes.
This represents a 35 percent drop in on net calls, which traditionally provide a larger return for the mobile networks thanks to the absence of termination rates.
Voice calling has the potential to affect mobile voice revenues (for carriers) more so than Viber or even Skype, which is not that big on mobile.
Many people are now using options for communication like the Instant Messaging in the form of WhatsApp, Skype, G-talk and Facebook Messenger.
WhatsApp is estimated to have over had 700 million users. Its growth rate puts it on track to surpass 1 billion users by the end of 2015.
WhatsApp, one of the world’s most popular messaging services, is still rising in popularity. The company, whose app is used by people around the world to send texts without paying carrier fees, in January said 700 million people now use its app each month, up from 600 million in August last year. Users are sending 30 billion messages per day, according to WhatsApp chief executive officer Jan Koum.
That makes it one of the world’s largest social networks, bigger than Twitter’s 284 million or even its corporate cousin, the photo-sharing service Instagram, which tallied 300 million users in February. Facebook itself, however, is still bigger, topping 1,3 billion users signing in each month.
Potraz quarterly report released this month said revenues generated by mobile network operators declined by 18 percent to US$907,3 million last year.
According to the report, revenues generated in the fourth quarter declined 11,3 percent to US$219,7 million in comparison to US$247,8 million generated in the 3rd quarter of last year. Econet’s quarterly revenues declined 15,4 percent to US$158,2 million while Telecel’s revenues declined 3,7 percent to US$29,4 million.
However, Net One’s revenues increased 5,9 percent to US$32,1 million. In the quarter under review, Econet had the highest Average Revenue per User per month (ARPU) at US$8,17 while Net One had the lowest at US$3,35.
The total number of mobile money transfer subscriptions grew by 7,3 percent to reach 5,3 million from 4,9 million subscribers recorded in the previous quarter. The total value of transactions on mobile money services increased by 10,6 percent to US$445,7 million from US$403 million recorded in the previous quarter. The number of agents also increased 13,7 percent to reach 23 379 from 20 569 agents recorded in the previous quarter.
An annual comparison of total value of transactions shows an 80,8 percent increase in deposits to US$1,4 billion in 2014 from US$797,9 million recorded in 2013. The total number of agents increased by 14 210 new agents to reach 23 379 from 9 169 agents recorded in 2013. Mobile money subscribers also increased by 71, 9 percent to reach 5,3 million from 3,1 million subscribers recorded at the end of 2013.
Econet had a 98 percent market share of value of total deposits whereas Telecel and NetOne had 1,9 percent and 0,1 percent respectively. Econet also had the largest network of agents with 17 181 agents. Telecel had 4 586 while NetOne accounted for 1 612 agents.