At the Mobile World Congress in Barcelona, the telecom operators use the stage to highlight their regulatory and business agendas for the year. In 2014, like every other year, telecom operators took to stage to complain about the impact of the Internet on business, especially in terms of concerns of voice based apps.
There were several voice apps around, especially in India, including and Nimbuzz, Viber, but we knew the world would change once Whatsapp launched voice. I ended up speaking with Neeraj Arora, WhatsApp’s head of business development, about Net Neutrality.
Most companies don’t let their senior execs speak with me because I end up asking challenging questions, but Neeraj was an old friend, and he could take his own decisions on whom to speak with. He had gone to college with my cousin Vivek. When we met for the first time at TiEcon in the late 2000’s, he had been with Times Internet then, as a part of their M&A team.
He then joined Google, and eventually moved with Google to Mountain View, once they wound up their product management and M&A teams in India around 2010. Neeraj had met the WhatsApp team in San Francisco, loved their approach, focus and vision, and ended up pitching a job for himself to them: as their first business hire. He handled telecom deals, and I remember him complaining once about Indian telecom operators, that they’re trying to fight WhatsApp, whereas a South-East Asian telecom operator had seen the writing on the wall, and told him – help me kill my current business model faster.
WhatsApp had done telecom deals in India, it worked for both WhatsApp and the telecom operators: Whatsapp was a primary reason for users to sign up for Internet packages. However, we knew what was coming. I spoke with Neeraj a day after WhatsApp announced it was launching voice, and I had some hard questions for him, that helped inform the Net Neutrality Campaign:
MediaNama: How does this change with voice, because it’s one thing to drive data…?
Arora: That is a better question. I would say, if you go back two and half years, when we started doing carrier deals, and this question was asked in every meeting: You want to work with us, we want to work with you, but it cannibalizes SMS. And now I don’t even get that question anymore. I’m predicting that the same thing will happen with voice. We’ll launch voice, and hopefully users will like it…I hope they like it. And, if they end up using our voice product, it drives data, and it will be the same curve again. First carriers will say…MediaNama: But it’s a completely different thing when you’re impacting around 8% of revenue (SMS) versus when you’re impacting 60-70-80% of revenues, right? The danger they feel is greater.
Arora: To be very frank, I’ve not talked to carriers after this announcement*. I will see how they feel. Jan on stage said yesterday that the future is about data, and there were two more carriers on stage on the same keynote with him, and they also said it’s about data. (If) it’s all about bits and bytes and not about messages and calls, then we’re aligned. This phase from when VoIP is not commonly used to a phase when hopefully everything flows through the data pipe…I’m sure there are lots of smart carriers who are thinking of that transition and planning for it, and pricing correctly. Why does India have such a low data penetration? It should be like 10x of what it is today, and I think we can help that. Google, Facebook, Twitter, these companies provide services that can speed up data penetration, and if we can work with carriers to do it, why not?MediaNama: So what are the things you hear from carriers in India when it comes to messaging conversations? What are the challenges you face with telco partnerships in India?
I think we’re doing fine. There are no challenges any more. I think the first was the biggest barrier because they didn’t know what will come out of it, and the first one we did with RCOM, has done exceptionally well, and that’s why we launched the second one with Tata (Docomo). There are a couple more in the pipeline. On the messaging side, I see no challenges. People get it, the carriers get it now. Also, there’s a very strong pull from the end users. Both of us serve the same users, and we have to listen to what the users want. We are providing a service, and they’re providing the data underlying it. If we go to the market combined and provide something which is better than what users can get if they just take some data connection off the shelf. Or, if people ask why do I need data connection, and they can say that you need it because we’ll give you unlimited Whatsapp, it makes a lot of sense.Voice, we’ll see how it goes.
On the way back from MWC, I had a 14-16 hour layover at Dubai Airport. With nothing much to do, I got time to think about the impact of WhatsApp voice on telecom.