Big threat to Vodacom, MTN, Cell C here soon

One of the biggest threats to mobile operators – voice calls from WhatsApp – is expected to launch soon.

In February 2014, WhatsApp chief executive Jan Koum said the company will add voice calls to its product in the second quarter of 2014.

Since then not much information was forthcoming from the company, but a recent update to WhatsApp indicates that voice calling may soon be launched.

The latest version of WhatsApp for the iPhone carries the popup message: “WhatsApp requires microphone access to send Voice Messages, record Videos with sound, make and receive Voice Calls”.

According to NDTV Gadgets, this latest change is a clear indication that WhatsApp voice calling is around the corner.

Mobile messaging services like WhatsApp, Facebook Messenger, WeChat, BBM, Skype, and Google Hangouts have already put a big dent in SMS revenue.

Some people predict that WhatsApp voice services will hurt the mobile operators’ voice revenues – the main revenue stream for cellular companies in South Africa.

Time for mobile operators to worry

Vodacom spokesperson Richard Boorman said that mobile messaging voice services have not had a major impact on their voice revenues to date.

However, WhatsApp is in a different league. It is by far the most popular mobile messaging service in South Africa, with millions of South Africans using WhatsApp daily.

Social media SA subscriber numbers
Social media SA subscriber numbers in March 2014

Mike Fairon, MTN South Africa’s GM for products and solutions, said that WhatsApp is more popular than any of the other messaging players, which leads them to believe that its impact is significant.

MTN CEO Sifiso Dabengwa previously said that the impact of WhatsApp’s voice service will depend on the company’s business model. “If the voice service is a free service – that could be a game changer.”

Former FNB CEO Michael Jordaan concurred, saying that WhatsApp’s plan to offer free phone calls should seriously worry telecommunications CEOs and boards around the world.

“I suspect they [mobile operators] may soon stop promoting WhatsApp or not include the App in the low-cost smartphones to protect revenue,” said Jordaan.

How to protect voice revenues

The mobile operators have some options to defend against free voice calls via mobile messaging services, including charging higher VoIP data rates or even shaping some traffic on their networks.

These interventions may be met with resistance from consumers, and it looks like the mobile operators may attempt to partner with the messaging platforms instead.

“MTN doesn’t underestimate the impact of OTT players and continues to look for partnership models that work for both,” said MTN’s Fairon.

Cell C CEO Jose dos Santos said that operators need to embrace mobile messaging services and find ways to work with players like WhatsApp if needed.

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Big threat to Vodacom, MTN, Cell C here soon