More on the WhatsApp's
acquisition by Facebook, it has been announced that "WhatsApp will add free
voice-call services for its 450 million customers later this year" laying down
a new challenge to telecom network operators just days after Facebook scooped
it up for $19 billion.
The
text-based messaging service aims to let users make calls by the second
quarter, expanding its appeal to help it hit a billion users, WhatsApp CEO Jan
Koum said this at the Mobile World Congress in Barcelona on Monday.
Buying WhatsApp has cemented Facebook’s
involvement in messaging, which for many people is their earliest experience
with the mobile Internet.
Adding voice services moves the social network into
another core function on a smartphone.
On Monday, Facebook Chief Executive Mark
Zuckerberg defended the price paid for a messaging service with negligible
revenue.
He argued that rival services such as South Korea’s KakaoTalk and
Naver’s LINE are already monetizing at a rate of $2 to $3 in revenue per
customer per year, despite being in the early stages of growth.
Media
reports put WhatsApp’s revenue at about $20 million in 2013.
“I actually
think that by itself it’s worth more than $19 billion,” Zuckerberg told the
Mobile World Congress. “Even just independently, I think it’s a good bet.”
“By being a
part of Facebook, it makes it so they can focus for the next five years or so
purely on adding more people.”
WhatsApp’s
move into voice calls is unlikely to sit well with telecom carriers.
WhatsApp and
its rivals, like KakaoTalk, China’s WeChat and Viber, have won over telecom
operators’ customers in recent years by offering a free option to text
messaging. Telecom providers globally generated revenue of about $120 billion
from text messaging last year, according to market researcher Ovum.
Adding free
calls threatens another telecom revenue source, which has been declining anyway
as carriers tweak tariffs to focus on mobile data instead of calls.
Since the
advent a decade ago of Skype’s voice-over-Internet service, which Microsoft has
acquired, and the rise of Internet service providers like Google, telecom bosses
have gotten used to facing challengers whose services piggyback on their
networks. But carriers complain that the rivals are not subject to the same
national regulations.
Mats Granryd, the CEO of Swedish mobile
operator Tele2, said he was happy to partner with the likes of WhatsApp because
of the additional data traffic they generate. But he shared the concerns of
other network operators that they must operate under strict national
regulations that Internet companies are not subject to.
Internet firms “need to be regulated a little
bit more, and we need to be regulated a little bit less,” said Jo Lunder, who
heads Russian mobile network operator VimpelCom.
Vodafone CEO Vittorio Colao said he did not
understand how such an important acquisition as the Facebook-WhatsApp deal
could go unchallenged at a time when European network operators were facing
intense regulatory scrutiny.
“These types
of deal are a clear indication that the world is changing and the regulations
don’t fit anymore,” Colao said on the sidelines of the conference.
Both
Facebook’s and WhatsApp’s CEOs have cast themselves as partners to telecom
network operators.
On Monday,
Koum also announced a partnership with E-Plus, the German subsidiary of Dutch
group KPN, under which it will launch a WhatsApp-branded mobile service in
Germany.
The European Parliament is set to vote Monday
night on a package of proposed telecom market reforms which among other
provisions would restrict the ability of carriers to charge Internet companies
like Facebook to give them an enhanced service in handling their network
traffic.
Well,whichever the latest development is; keep enjoying your communication.
