Even as the debate on net neutrality intensifies in the country, the response to the calling feature of WhatsApp, which threatens voice revenues of telecom service providers, has been critical.
(Net neutrality is the principle that all legal internet content should be equally accessible to consumers and that internet service providers should not favour, block or slow down access to any of it.)
The popular messaging service company owned by Facebook launched the calling option two weeks ago in India. However, bandwidth constraints are keeping the experience from being smooth.
Many users the Business Standard spoke to said they switched back to normal calls after trying calling through WhatsApp, because they experienced lag, call drops, and poor voice quality in the app.
A few telecom operators such as Bharti Airtel had planned to charge separately for internet-based voice calls provided by Skype, WhatsApp and Viber, as they were expected to affect revenue. However, opposition to this kind of pricing led to the government setting up a committee to look into the issue of net neutrality in January. A consultation paper released by the telecom regulator was also triggered by this development.
According to experts, calling over WhatApp may not be an immediate threat to telecom service providers, but its impact cannot be ignored, because the experience will improve substantially on 4G (fourth-generation) networks.
"The number of mobile internet users may be small right now, but they are growing by the hour and operators are also investing heavily in networks, which will improve the quality of calls over the internet," said Prashant Singhal, global telecommunications leader of audit and consultancy firm EY. Singhal added even though the quality of an internet-based call would never be the same as a normal one, it would appeal to price-sensitive consumers.
WhatsApp being the largest messaging application in the country, the dent on operators' revenues is expected to be huge. While a voice call on a normal network costs 50 to 60 paise a minute, it comes to 20 paise for a call made over the internet.
In December 2014, WhatsApp had a 52 per cent market share of all users using over-the-top (OTT) messaging in India. It was followed by Facebook Messenger (42 per cent) and Skype (37 per cent). According to the Trai, WhatsApp has 70 million users in India.
Non-data revenues (SMS and other services) of telecom players have been declining, for Bharti Airtel from 8.1 per cent of total revenues in the fourth quarter of 2013 to 5.6 per cent of total revenues in same period of 2014.
The user base of OTT messaging services has grown to more than one billion in less than five years globally, affecting telecom players. This has been the main reason for telecom companies asking for separate regulation for OTT firms. Now, 83 per cent of Indian internet users access the internet through a mobile phone. The average revenue earned by a telecom firm for an SMS is 16 paise, compared to 1 paisa of data usage charges for messaging through apps. "While net neutrality is a serious issue, some regulation is needed for voice services over the internet, since telecom companies pay a huge amount for licences, and there has to be a level-playing field," said Singhal.