Telcos should proceed cautiously with communication apps

Mobile operators are currently in a similar position to the fixed operators of ten years ago as third-party VoIP providers look to move in on their territory. WhatsApp has had a significant impact on theNetherlandsmobile market, and other companies such as Skype, Viber, and Ping are looking to have the same impact on other mobile markets around the world.

In response to this threat, mobile operators have adopted two strategies. Firstly, they have introduced larger call and SMS bundles to undermine the price differential between their voice services and third-party voice apps. Secondly, they have scrapped “unlimited” data bundles for tiered pricing, which has made it more expensive for customers to extensively use their mobile devices for VoIP calls.

However, the increasing availability of free Wi-Fi is a game changer. The popularity of homezone tariffs demonstrates that many customers frequently use their mobile phones at home and in the office, which are both places where customers are also likely to have access to free Wi-Fi. Using third-party communication apps over free Wi-Fi makes it easy for customers to make free calls, send free SMSs, and incorporate “presence” in ways that are beyond the control of mobile telcos.

Willy Gerard (10M+)

MEA Telecom Strategist


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