Martin Geddes

WhatsApp with the future of voice?

Facebook announced on February 19 that it is acquiring real-time mobile messaging app WhatsApp for $19 billion. WhatsApp has taken off recently, with 450 million highly active users, 70% of which use the app every day. 

On Facebook’s newsroom site, the company said that WhatsApp’s messaging volume is approaching the entire global telecom SMS volume. 

So, what does all this messaging have to do with the future of voice?  If you remember back to early 2013, when Facebook announced its Facebook Messenger app, we recognized this development as one of the early consumer instances of Hypervoice – integrating voice calling into users’ activity stream. WhatsApp, which enables voice messages in the activity stream as well as videos and location sharing, further shows the value in users being able to go from typing to talking seamlessly within the app.  

In another twist to the story, WhatsApp announced that they will also be adding voice services in Q2 of this year.  Jan Koum, WhatsApp chief executive, made the declaration at Mobile World Congress in Barcelona, where he spoke as part of the Keynote Session on Feb. 24.  Koum told the audience: “We think we’ll have the best voice product out there,” he said. “It’ll use the least amount of bandwidth and we’re going to optimise the hell out of it.”

Below, we share the Hypervoice Consortium's take on what this means for telcos and for the future of voice...

What does WhatsApp mean for the Telcos?

  1. The greatest value is in personal communications, always has been, always will be. "Social media" is a continuation of that eternal trend.
  2. This was a distress purchase for Facebook - some say signaling the end of organic growth.  Facebook remains 100% dependent on telcos for distribution of its services, so there is no need to panic. Lots of data plans are sold on the back of Facebook.
  3. The ad-funded services bubble is finite in size, since the ad market is tiny in comparison to telecoms. Facebook, Google et al need to find news ways of growing. Google has a massive diversification strategy, whereas Facebook is busy "fracking your privacy" with no Plan B.
  4. The telco industry's current efforts to re-invent SMS with RCS (branded "Joyn") are misguided, likely to be counter-productive, and should be ended - or at least re-positioned for B2C use. There is minimal competitive advantage in messaging applications for telcos compared to OTT players for pure consumer messaging.

WhatsApp is widely used internationally but is not as well known in the U.S., so the acquisition may also be indicative of Facebook’s efforts to expand globally.  

So, Is Facebook looking to build a communications empire by acquiring apps like this? Probably not... 

What does WhatsApp mean for Hypervoice?

  1. There is value in simple, useful stuff - and people will pay for it, as WhatsApp shows. There is demand for applications that respect your privacy.
  2. Voice remains a virtual telco birthright, since it has stringent quality requirements to perform well, and OTT applications fail to consistently deliver a good experience.
  3. Operators should shift the focus of attention from messaging to voice innovation, where they do have a competitive advantage.
  4. Rather than attempt to create application services, they should focus on the enabling platform, particularly where there are issues of performance, security and other non-functional requirements. 
  5. SMS was neglected for two decades whist the cash was extracted with no re-investment. If telcos don't invest in Hypervoice and new value-added services, expect telephony to get WhatsApp'd in the end.

Interestingly, WhatsApp promised users they would continue to honor their core values, including not incorporating advertising into their monetization model.  

We'd love to hear from you, the Hypervoice community. What are your thoughts on this acquisition and the announcement that WhatsApp will be adding voice services?