The IM (instant messaging) and VoIp apps like WhatsApp and Viber who provide free unlimited messages and voice/video calls respectively have taken over the world by storm. The total number of messages sent and received through WhatsApp per day have now overtook the total number of SMSes sent and received everyday. WhatsApp has disrupted the IM market in the same way how Skype did to international calling market.
This has resulted into people shifting away from operator provided services like SMS and other value added services. Although the government had previously mentioned that they are not looking at regulating OTT (Over The Top) players, as per Economic Times, TRAI now wants to get an idea of these OTT apps and how they fulfil consumers needs as well as how operators get affected by their presence. This revised stand must be an effect of increased pressure from telcos like Bharti Airtel, Vodafone India and Idea Cellular who complain that OTT players are free riding on their network infrastructure which costs billions of dollars to set up.
According to data from a research firm Ovum, telecom operators lost around Rs 4,700 crore in SMS revenues in 2012. This loss was expected to increase to Rs 18,671 crore in 2013. But these numbers are not the real way to look at it. SMS accounts for not more than 5% revenues of major telecom operators in India. These numbers might be even less for other carriers. As more people start using these mobile data dependant apps, consumption of data increases and so does the revenue through data bundles. This, in part, fills the draughting SMS revenue stream that mobile operators are complaining about. When it comes to ‘free voice calls’ through apps like Viber, the price for data consumption for each VoIP call is half of what it costs for a normal voice call but the quality of voice isn’t half as good in comparison. Neither the 3G data networks are so widespread in the country for consumers to make a switch from normal voice calls to VoIP calls completely.
The actual worry of telecom operators is that they might be pushed back from the limelight and end up into just a ‘dumb pipe’ of the industry. To combat with this, operators around the world are already working on their own IM apps. Bharti & SoftBank have already co-developed an IM app called Hike which competes with WhatsApp, Viber, LINE and WeChat. Starting from today, Hike has started offering unlimited free SMS to its users. Bharti Airtel has started to drastically increase 2G data plans. Similarly, instead of opposing to these services, Reliance Communications has started rolling out flat rate data bundles for WhatsApp users. As we have already explained, Reliance JIO might soon offer VoIP over its pan India 4G license, forcing other major operators to follow the suit.
BBM, WhatsApp and Facebook are rumoured to roll out free voice calls over data networks in the near future. We think that operators should collaborate with these OTT players and create some kind of monetisation strategy which can be a long term revenue generator for both. Do you think these OTT players should pay telecom operators for using their network infrastructure? What do you think? Let us know in the comments below.
Computer science engineer turned technology blogger. Following consumer electronics industry closely from 2006, he can now predict pretty much where the market is heading. He has a dream to own Android, Windows Phone and iOS smartphones all at the same time.