In late December 2014 screenshots of WhatsApp’s voice calling emerged, which indicates the company may launch the service soon.
WhatsApp initially planned to launch voice calling in the second quarter of 2014. However, WhatsApp CEO Jan Koum said in October 2014 that the launch would only happen in the first quarter of 2015.
Koum said WhatsApp’s voice calling service would be a mobile-only service, competing against the likes of WeChat, Viber, and Skype.
While mobile messaging-based voice calling has not gained much traction in South Africa yet, WhatsApp’s scale may change this.
WhatsApp (with Mxit, BBM, and other IM services) has seriously dented SMS revenues, and some industry commentators said that the same may happen with voice revenues.
Mike Fairon, MTN South Africa’s GM for products and solutions, said that WhatsApp is more popular than any of the other messaging players.
MTN CEO Sifiso Dabengwa said that if the WhatsApp voice service was a free service, it 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.
Mobile operators not too worried
While some industry experts warn of a significant impact on voice revenues, not everyone is worried about WhatsApp voice calling.
Vodacom spokesperson Richard Boorman said that as long as people are using their smartphones, it’s ultimately a positive for them.
“If anything, this vindicates the massive investment that we’ve been making in our network with the viability of VoIP services so dependent on the quality of the network connection,” said Boorman.
He added that Vodacom was working towards a model which “works for all parties and supports continued network investment”.
Cell C CEO Jose dos Santos said that he was not concerned about the impact of free WhatsApp voice calls on the company’s voice revenues.
“The decline in voice revenue has more to do with prices coming down as a result of competition in the market than the introduction of VoIP services,” said dos Santos.
He added that mobile operators need to embrace OTT players and partner with them to provide customers with added value.
“Cell C looks forward to launching WhatsApp’s new voice service on our network,” said dos Santos.
Telkom said that it does not anticipate a major impact on business voice revenues as a result of WhatsApp introducing voice calls to its functionality.
“While we are unable to accurately predict the impact on voice call revenues overall, it would be safe to say that impact, if any, will be from the consumer end of the market,” said Jacqui O’ Sullivan, Telkom’s Managing Executive for Group Communication.
She said that Skype and Google Talk have previously introduced voice options through their respective platforms, and then already Telkom was gearing for a more effective data play.
“We don’t necessarily see one product or platform having any more of an impact on voice services than any other just yet,” said O’ Sullivan.
MTN believes that voice services will still have a place in the market despite the introduction of new services.
“We are therefore not too concerned, Wechat and Viber have been around for a long time,” said Larry Annetts, Chief Marketing Officer at MTN SA.
Why free WhatsApp voice impact may be limited
One of the reasons why mobile operators may not be too concerned about free WhatsApp voice calling is the popularity of integrated packages.
Many contract subscribers are on integrated packages, which include voice and data. If they use less minutes and more data it wouldn’t really impact revenues.
Looking at the prepaid market, smartphone penetration is sitting at around 25% and the impact would mainly be limited to this group.
The impact of WhatsApp voice calling on revenue will be the differential between what they pay for calls, and how much the VoIP data would cost them.
Smart prepaid users can pay as little as 8c per minute with some calling packages. They may therefore still purchase some voice products, and purchase more data for WhatsApp calling.