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VoIP may just be the killer app

mbv514 voip may just be the killer app
In a figure that will make everyone, except digital natives, feel old, VoIP technology is now over 20 years old. It took the advent of Skype, over ten years ago, for the concept to start seeping into the consumer world. Now in the age of hyper connectivity VoIP is enjoying a very mainstream renaissance- across business and consumer usage.

Every social media giant on the block is now integrating a VoIP feature into their realms. Forecasts like Ovum Research’s view that VoIP calling is poised hit 1.3 trillion minutes globally by 2018 has helped with the push.

The most significant bellwether for VoIP moving from decade old niche player to mainstream service is Facebook’s acquisition of WhatsApp. Ever since Facebook acquired WhatsApp for around US$19 billion last year, everyone has been wondering how the social networker would leverage the asset.

Yet while this move has delighted the tech press and seemingly consumers in the West, the concept of VoIP apps for daily communication is something that is firmly established in the mega markets of India, Africa and the Middle East, where mobile usage has always usurped fixed line and apps like Viber are de rigueur.

Viber was launched in 2010 and since then has sped on an upward trajectory of growth. The app is now being followed by over 500 million people who are attracted to both the voice and video calling features. The app is also installable on nearly all mobile devices that connect to the internet.

Plus there is a PC version.

Facebook’s WhatsApp boasts 700 million in-app users, which exceeds the telephony customer base of any telco. Yet Facebook isn’t looking at voice as a revenue source. Facebook Messenger CEO David Marcus, said, “VOIP is just one way that the company hopes to use the messaging app as a platform for much bigger things, including online payments.”

But it has taken WhatsApp more than a year to deliver on its promise to add VoIP to its messaging app, a move that was initially slated for launch in 2Q14.  Following a global beta trial and an invite-only version of the service, Facebook now has enabled VoIP on its Android and iOS app for all users, as an update. With 700 million global monthly active users of WhatsApp, the inclusion of VoIP has the potential to significantly affect mobile operators’ voice revenues.

Give the new upgrades, Ovum forecasts that the WhatsApp’s user base is well on track to reach 1.1 billion users in 2015, according to its OTT Communications Tracker.

Yet WhatsApp is entering an already crowded market. Operators and service providers have had some lead time to prepare their responses, including upgrading their own services or devising bundling strategies. There is also the possibility that operators in some markets will lobby regulators for the right to block WhatsApp Calls. Ovum analysts suggest that WhatsApp needs to move more quickly in order to realize the VoIP  opportunities and to “remain competitive in a market where the emphasis is turning toward the use of communications services as a platform for providing content and commerce.”

As telecommunications is generally becoming a commodity, the winners in the VoIP connectivity game are those that get pricing, bandwidth, data integrity and billing right and easy.  For telcos or indeed social networking platforms moving  into application service provision is the path to retain  users and the race is on to offer more innovative services.

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mbv514 voip may just be the killer app
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