Business News of Tuesday, 5 February 2013
WhatsApp Messenger, an application which allows unlimited free text-messaging between users, is gradually killing mobile operators just like what Skype did to international calling on landlines.
Thousands of Ghanaians, frustrated by poor quality of service rendered by the country’s six cellular networks, are making WhatsApp Messenger their medium of choice as they look for more personal contact with friends and relatives separated by thousands of miles.
To the annoyance of some cell phone providers in Ghana and many parts of the world, WhatsApp has become a kind of quasi replacement for the old fee-based mobile SMS, which is regarded by many analysts as one of the biggest cash cows of the telecoms industry.
Reuters reported that in Spain for instance, the three biggest mobile operators are teaming up to launch a service they hope will help them better compete with WhatsApp, which is luring customers with the promise of free messages. Mobile operators such as Vodafone, Orange and Joyn had planned to offer free messaging, enhanced call features and in some cases free calls.
When reached for comments, the Corporate Relations Manager of Airtel Ghana, Kwame Poku Gyan told Economic Tribune: “We do not have any evidence to show that the use of WhatsApp has affected our revenue inflows or our operations for that matter negatively.”
He continued: “Since WhatsApp is a data application, it offers us an opportunity to drive revenue via data.”
Last month, WhatsApp quietly announced that two billion messages were sent by its users in a single day. Since launching in July 2009, WhatsApp has slowly grown by word-of-mouth and the same simple viral mechanism that fuelled Skype: both sender and receiver must own the app.
The ability to send messages between any kinds of smartphone gives WhatsApp an advantage over BlackBerry Messenger and Apple’s iMessage, which are restricted to owners of similar devices.
Because WhatsApp Messenger uses the same internet data plan that one uses for email and web browsing, there is no cost to message and stay in touch friends. In addition to basic messaging WhatsApp users can create groups, send each other unlimited images, video and audio media messages. The co-founder of WhatsApp Jan Koum told the media recently that: “We always concentrated on SMS as the user experience. This allowed us to separate ourselves from companies like Skype, Yahoo or MSN because they always had a desktop-first approach.”
We didn’t have the desktop legacy to worry about. We wanted to allow people to switch from SMS to WhatsApp in a matter of seconds, he added.
The co-founder of hugely popular WhatsApp however defended accusations that it ‘steals’ revenue from mobile operators. Brian Acton insisted that the firm is not a threat to operators, despite conventional wisdom suggesting that the two billion messages that its users send each day are cutting into operators’ SMS revenues.
“I view it from the perspective that we’re facilitating a broad movement to data plans and the entities that provide those plans are the carriers, so they stand to benefit quite substantially. It’s all about the data,” Acton has said in the company’s website.
He concluded: “We want to build something that is awesome for users and great for them but also something we are proud about on the tech side – rather than just going out and spending lots of money on servers.”
Earlier this year, Sequoia Capital, a leading Silicon Valley venture firm, invested $8 million in WhatsApp, but declined to comment on revenues or profits.