When Facebook purchased Whatsapp in February 2014, one of the
promises made by Facebook founder Mark Zuckerberg to Whatsapp users was greater
innovation and improvement of user experience. In line with this, Whatsapp has
introduced a new voice call feature that enables users call other Whatsapp
users with data charges applying.
Although this feature has been existing has been
existing for a while on some platforms such as Viber, the Introduction on
Whatsapp will have more impact on the telecommunications industry because of
its vast number of users. This is the case in Nigeria where Whatsapp has beaten
2go, BBM and Facebook chat to become the biggest chat service in the country.
According to Jana mobile poll, 45% of Nigeria’s mobile users are on Whatsapp
and this figure is likely to increase with the reducing cost of phones with
internet accessibility. In fact one can now get a brand new android enabled
phone for as low as 8000.
Telecom operators in Nigeria are going to look at
this voice call feature on Whatsapp with panic due to Whatsapp large usage in
the country. Even though the effects on them are not certain, one thing is
sure, it’s going to have a huge impact.
It will be naturally more profitable for one to make
calls on Whatsapp if the cost of data expended is lower than using the normal
voice call service. While the data charges are quite uncertain now, data optimization
is something the Whatsapp team has worked and is still working on right now.
This comes at a time when data costs in Nigeria is decreasing rapidly due to
increasing competition in the telecoms industry, competition that is not just
between major telecom operators but also third party data providers that charge
extremely low costs to provide data.
The telecom companies might be shooting themselves
in the leg if they continue reducing data costs for it will cause people to use
Whatsapp calls more than the traditional voice calls where they make huge
profits from the absurd rates they charge for this service. Providing cheap
data that makes customers rather use the Whatsapp voice call just wouldn’t seem
rational to them and may make data prices skyrocket especially when the telecom
companies collude. Even the current research going into effective 4G broadband
technology by the companies might be stopped or hindered because such a service
would actually make the Whatsapp call feature more effective considering the
smoother data connection. The scenario I have just portrayed shows the service
as a hindrance to the smooth flow of the market because increased data costs
makes other uses of data aside Whatsapp voice calls quite expensive and
research on 4G broadband technology disrupted thereby dislodging market
efficiency.
Another effect this Whatsapp voice call feature
might have on the telecoms industry is that it might make telecom companies
decrease costs of the traditional voice calls down to a point that makes it
expensive to for a user to use the Whatsapp voice call and maintain data costs.
This would be an efficient but difficult strategy because they have to charge a
price for calls and data that would enable them maintain profitability and have
to constantly adjust these prices to maintain competitive power. In this
scenario, the feature actually improves the telecoms industry, at least on the
part of the consumer. Efficiency would be achieved and companies would still be
willing to provide the best service possible and if regulators reduce licensing
costs, more operators would enter the market bolstering competition.
They regulators have to watch out though as this
telecom companies might want to make it difficult for consumers to use Whatsapp
or they may use other crooked means to stall the effect of the Whatsapp calls.
This telecom companies in Nigeria are likely to collude and provide
oligopolistic prices, therefore they regulators have to be on their toes in
such situation because they are the only ones that can bring balance to the
telecoms industry and make sure such innovation like the Whatsapp call really
provide positive benefits to consumers.
