The number of users of mobile voice-over internet protocol (mVoIP) is set to reach 1 billion by 2017 (or one in seven subscribers), according to Juniper Research. Also known as over-the-top services, they allow consumers to bypass traditional voice calls and text messaging. They are disrupting the telecommunications ecosystem.
Arthur D. Little, a consultancy, reckons that the mVoIP market will increase between $14-100 billion in 2016 (2-20 percent of total voice revenues); Skype was identified as “the most powerful disruptive force”.
Whether as an operating software specific, e.g., BlackBerry Messenger, or cross-platform third party applications like US-based Whatsapp and China-based WeChat, consumers prefer these over-the-top messaging apps because of the rich user experience and lower prices. Traditional SMS messaging is already on the decline in the developed world.
In October 2014, Whatsapp, the six-year-old proprietary, cross-platform messaging app founded in 2009 by Brian Acton and Jan Koum, both former employees of Yahoo!, was the most globally popular messaging app with more than 600 million active users, with India alone boasting a user base of more than 70 million. It was followed by China’s WeChat (468 million active users), Viber (209 million active users), and Japan’s LINE (170 million active users). In January of 2015, Whatsapp has reported surpassing 700 million users.
WhatsApp Messenger is an instant messaging app for smartphones that operates under a subscription business model, enabling users of select feature phones to use the internet to transmit communication. In addition to text messaging, it can be used to send images, video, and audio media messages. Locations can also be shared through the use of integrated mapping features.
Whatsapp is penetrating emerging economies like Nigeria where texting is popular activity. There is room for the service to expand – availability and rapid adoption of technology (i.e., broadband network and high levels of smartphones, cost, social networks) and availability of an alternative are said to be catalysts of OTT. In Nigeria, there are 12 million 3G smartphone, according to MTN, and by 2017 the number of smartphone users in Nigeria is expected to rise to 35 million, from 5.8 million in 2012.
Because of poor quality of service, e.g., dropped calls and price of international calls, price- and quality-conscious Nigerians are embracing this alternative means of staying in touch with their network at home and abroad. Some telecom operators and phone makers, too, are embracing this change, but monetisation still remains a key challenge. Airtel, for instance, now offers unlimited Whatsapp for its Nigerian subscribers. Nokia, the ubiquitous handset in Nigeria, has since introduced an Asha phone with a dedicated Whatsapp button.
Adoption of OTT services will rise together with the increase in the number of smartphone users in Nigeria coupled with efficient and reasonably priced broadband internet service (as envisaged by the broadband policy that was launched recently). Infinix, a phone maker based in Hong Kong, and two Chinese phone makers, Techno and Huawei, are aggressive about introducing low-priced smartphones into Nigeria.
Beyond mVoIP, operators also see an opportunity for fixed-line VoIP, especially for businesses with presence across Nigeria. Their spread and the need to communicate regularly are likely to push demand for cost-effective fixed-line VoIP. This line of business, compared to wireless technology, is capital-intensive. Nigeria’s fixed-line network is under-developed. Active fixed lines in the country are a paltry 190,719 as at September 2014, according to information from Nigerian Communications Commission (NCC) website.