Mobile messaging: how simple messaging apps can rival global mobile operators

It was a deal any business broker would have been proud of. The deal that blew away the global tech industry and changed the image of mobile messaging forever. Despite the scepticism and accusations of excessive valuation, Facebook found 19 billion reasons to believe in the future and scale a mobile app can deliver. However, the massive Facebook-WhatsApp deal simply highlighted a growing trend in the acquisitions market: messaging platforms are hot stuff. The purchase of Viber by Japanese corporation Rakuten and the rapid growth in the subscription numbers of other messaging platforms such as Telegram, Line and KakaoTalk signal a growing confidence in the potential for revenue generation beyond simple messaging services. Yet the high-hanging fruit could be voice services and the potential of challenging the world’s established mobile voice operators.

The prized model of IP-based mobile messaging for end-users is its capacity to utilise low bandwidth in communications. This is less of a concern among developed-country, urban consumers, many of whom have post-paid mobile contracts that include mobile broadband packages and who have access to free Wi-Fi on a regular basis. Many such users are likely to use apps such as WhatsApp because they enjoy the interface and their friends are on it. However, for the more than six billion people living in developing economies, mobile messaging is often an important cost-saving tool. Partly a result of much lower incomes, the vast majority of them rely on prepaid mobile services, meaning running out of credit or not having enough money to run Internet data is a common occurrence. Yet mobile messaging circumvents this issue by relying on a mobile data signal and not an active capacity for downloading/uploading per se. Theoretically at least, a similar principle is possible with voice calling, which would effectively almost remove mobile operator fees from a user’s mobile experience altogether.

The tricky part is putting this technology into action. WhatsApp has already announced its launch of voice services in the second quarter of 2014, promising similarly low-bandwidth quality as its messaging. Viber already offers voice calls but the quality is poor if Internet connectivity is weak, and it is the same situation with Japan’s Line, which has partnered with domestic carrier Docomo. Japan has one of the world’s highest mobile broadband penetration rates, so connectivity is clearly not an issue there. Try using Viber or Line to make a call in rural India and the service seems extremely pro-developed-world. There is thus great opportunity – both for venture capitalists to invest in and for developers to build – in the transfer of mobile messaging services to a practical voice operational level. Huge consumer markets in Latin America, Africa and Asia would drive surging uptake in a low-cost voice alternative, although mobile operators would likely have a major say in this dent to their revenues.

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