Yuvraj (22) is hooked to his smartphone, especially instant messaging (IM) platforms such as WhatsApp and Nimbuzz. Not just because he wants to send that quick text to his friends. But because he can make a “free” voice call.
Yuvraj is not alone.
Rising smartphone penetration is bringing out the frown linen on telcos as IM platforms (synonymous with Over-The-Top content providers) woo people with “free voice call” apps. Messaging apps are now passé. Some players such as BlackBerry Messenger (BBM), Line and Nimbuzz are more popular for voice than messaging.
“Earlier telcos lost out on SMS revenues because of these free messaging apps. Now, with the introduction of Voice-over-Internet-Protocol (voice calls over the Internet), the competition is intensifying,” an official from a leading telco told
Voice calls and text messages (SMS) put together represent nearly 75 per cent of a telecom company’s revenues. Telcos such as Vodafone, Airtel and Tata DoCoMo refused to comment on the issue. “It’s not that voice calls or SMS has completely stopped. Just that there are disruptions to this system with IM players coming up as a low-cost alternative. Many telcos (in India) will feel the pinch in another one year or so,” said Sameer Agarwal, CMO, RockeTalk. According to him, as data penetration goes up, competition will increase.
Free Call concept
Market sources say that it is inevitable that voice calls over the Internet create disruptions. The prime reason: Virtually free calls. While a three-minute call may be charged Rs 1.50 (or 50 paise a minute) by a telecom operator, it would cost no more than 30 paise if made via the Internet (or, say, an IM like Nimbuzz).
“The call is converted into data, which is charged at very low rates. It takes a fraction of the bandwidth. For the end user, it’s a near-free call. His call charge is included in the data pack he uses,” explains Vikas Saxena, CEO, Nimbuzz. Nimbuzz offers such voice-over-Internet services in India. According to him, telcos need to re-work their sustainability model in the long-run.
Some telecom companies (such as Telenor, Orange, Telefonica, T-Mobile, Vodafone) did try to create a global alternative standardisation through an initiative called Rich Communication Suite . But that is yet to see the light of day.
No Pushovers
Incidentally, telcos feeling the heat from IM players is now becoming a global issue.
According to international media reports, the Government in Vietnam is working out ways to regulate Over-The-Top content providers and IM players. Some operators are trying to make money by giving bandwidth to IM players. Data charges are included in monthly bills.
Others have gone ahead with partnership plans such as Reliance with WhatsApp and Airtel with Facebook.
The other alternative has been more direct — to join the bandwagon with own Over-The-Top content offerings. Orange’s “Libon” and T-Mobile’s “Bobsled” are some examples. In India, Airtel boss Sunil Bharti Mittal’s son, Kavin, has launched “Hike”. Market sources expect it to take on IM players.
abhishek.l@thehindu.co.in