On February 19, Facebook announced its purchase of the mobile messaging service WhatsApp for $19 billion in cash and stock. Acquisitions like this remind investors of the dot-com bubble. Aside from what the world of financial investing says about this, let’s look at what this means for your international calling and Breeze mobile app business.
Poised to reach one-billion users, Whatsapp’s growing number of subscribers was probably the most attractive reason for Facebook to buy. The network of Facebook and WhatsApp users alone is threatening big telecom’s SMS business. Zuckerberg has stated that Facebook advertising will not be part of WhatsApp service. So what is the plan for WhatsApp?
Not long after the acquisition, WhatsApp announced adding voice calling this year. With this new service, WhatsApp is challenging services like Skype and Viber. Moreover, this will not be well received by telecoms that are still looking for ways to monetize data plans over voice plans.
WhatsApp voice call service will immediately allow WhatsApp users to talk to each other. We will see how WhatsApp competes on the international calling to landlines and mobiles. Viber already challenges Skype with lower costs for some countries. Skype, Viber and soon WhasApp are most likely focusing on calling rates between developed countries. Not surprisingly, developing countries have higher rates which gives small services that focus on those countries the opportunity to have a competitive offer. That said, when competition comes down to price, winning becomes less attractive for everybody. The key to succeed is not by focusing on price but offering extras that make your service more attractive beyond the price point.
Make easy, easier. WhastApp can be downloaded from the App store and quickly connects to other WhatsApp users but it is difficult to use on more than one device. Breeze range of applications for IOS, Android, Black Berry, Windows phone and recently for Windows Vista/7/8 allows your customers to use your VoIP service on several devices with no fuss.
WhatsApp subscribers might soon be able to talk to each other but this does not mean that the number of subscribers in developing countries will increase. WhatsApp is free to download but after a year it charges a fee of $0,99 per year. This might not be much for the first world but for countries with population that is credit challenged, this is a big difference from free.
Technology challenge. Even though more people in developing countries are switching to smart phones and downloading WhatsApp for the messaging service. Two factors are challenging the voice call service in developing countries: Data plan services and bandwidth. Not all smart phones activated in developing countries have a data plan. Users mostly rely on free wireless networks that are scarce. This makes WhasApp users sporadically available for a voice call. In many countries internet bandwidth is still too slow to sustain quality voice services. Traditional phone calls will remain the main way of communication which makes Breeze calling service an attractive solution for immigrant communities that still need to call home connecting to the traditional telephony network.
Extra is always nice. While WhatsApp new voice calls is undoubtedly shaking the telecommunications market, the service does not seem to be aiming to replace features like redial, voice mail, call hold, music on hold, etc. These Breeze features will make your customers compelled to use the service and even promote it to their peers back home.