Service aims to let its 450m users make calls by the second quarter
WhatsApp will add free voice-call services for its 450m customers later this year, laying down a new challenge to telecom network operators just days after Facebook Inc scooped it up for $19bn.
The text-based messaging service aims to let users make calls by the second quarter, expanding its appeal to help it hit a billion users, WhatsApp CEO Jan Koum said at the Mobile World Congress in Barcelona on Monday.
Buying WhatsApp has cemented Facebook's involvement in messaging, which for many people is their earliest experience with the mobile internet. Adding voice services moves the social network into another core function on a smartphone.
Facebook CEO Mark Zuckerberg defended the price paid for a messaging service with negligible revenue, arguing that rival services such as South Korea's KakaoTalk and Naver's LINE were already "monetising" at a rate of $2 to $3 in revenue per user per year, despite being in the early stages of growth.
Media reports put WhatsApp's revenue at about $20m in 2013.
"I actually think that by itself it's worth more than 19 billion," Zuckerberg told the Mobile World Congress in Barcelona. "Even just independently, I think it's a good bet."
"By being a part of Facebook, it makes it so they can focus for the next five years or so purely on adding more people."
WhatsApp's move into voice calls is unlikely to sit well with telecoms carriers.
WhatsApp and its rivals, like KakaoTalk, China's WeChat, and Viber, have won over telecom operators' customers in recent years by offering a free option to text messaging. Telecom providers globally generated revenue of about $120bn from text messaging last year, according to market researcher Ovum.
Adding free calls threatens another telecom revenue source, which has been declining anyway as carriers' tweak tariffs to focus on mobile data instead of calls.
Voice calling through whats app may be fine the west but here in GCC I'm sure, in trying to block voip of whatsapp they will eventually block the whatsapp.
Just saying it by historical evidence of blocking viber, skype and other low end voips.
Nothing to see here, at least in the U.A.E., where I'm sure the Telecom Regulatory Authority will block its usage, finding it against the cultural and moral values of the country because it would pose as a competitive challenge to the dual-monopoly of Etisalat and dU.
Absolutely correct.....watch this space. It'll be exactly as predicted. TRA will not stand, idly, by and allow its duopoly of world record high telecom pricing be affected by an app that allows free calls. Goodbye whatsapp.....whatever helps the people will, as usual, be eradicated, swiftly to make room for even more record profit by Etisalat and du
Where is Telcoguy when you need him? With services like Skype and WhatsApp, who actually builds and pays to maintain the telecommunications infrastructure that they use? Is it for example, in the UAE Etisalat and Du? I assume they provide the infrastructure and means to connect to it and I pay them for this service; content travelling back and forth to me goes across their and numerous other telecomms/isps infrastructure to get it from the server it sits on, wherever that might be, to me. Are companies like Skype et al also paying for using the infrastructure in a similar manner and it just happens the data they transfer is my digitized voice in real time? If the Skype servers sit off-shore does that mean the onshore telcos/isps earn nothing above and beyond the fees they charge me? If revenues are under attack from such services could this actually drive up Internet connection charges so ultimately the end user loses?