aA stark difference in trends is being observed in the backdrop of rising call tariffs and increasing smartphone usage. With service providers reducing discounts and offers on calls and SMS, people are now increasingly relying on apps like Viber, Nimbuzz, Fring, Skype, KakaoTalk and Tango to make free calls using Wi-Fi or mobile data. This trend has mainly been observed among urban users especially with the call and SMS tariff expected to increase over the coming months.
Apps leverage on popularity of Android platform and Wi-Fi
According to Vikas Saxena, the CEO of Nimbuzz India, the users of the chat application in Indiaclocked around 1.68 billion minutes till the end of last year. This is three times that of 2011. Jayanth Kolla, who is partner in niche telecom research and also Convergence Catalyst, said that the trend of free calls from app-to-app arose during last year among young professional and college goers. With the rise in Android platform users and approval of VoIP by National Telecom Policy, the number of people using different apps is expected to see further increase.
Telecom Minister, Mr. Kapil Sibal, has urged companies to change their business models to make voice calling free while charging customers for usage of data. According to Rajat Agrawal who is executive editor of BGR India, the increased Wi-Fi offerings have also contributed the popularity of apps offering free calls like Skype and Viber which helps customers to make use of the Wi-Fi network they pay for.
Decreasing revenue of telecom operators
Consumers have found a way to counter the rising SMS charges by the usage of free chat apps like BlackBerry messenger, Nimbuzz, WhatsApp as well as social media like Twitter and Facebook. These apps allow users to share videos and pictures as well without incurring additional costs. This has resulted in significant dropping of SMS revenues in domestic countries. According to Neha Dharia, an analyst at the consultancy firm Ovum, a loss of Rs. 1,600 crores was faced by domestic telecom companies due to the popularity of these services. Bjas Murthy, associate director, products and services, VodafoneIndia, said that the SMS revenue will see 50% erosion in the coming two years.
BlackBerry’s BBM Voice soon to be launched in India, Facebook’s free calling service between iPhones in the US, the expected growth spurt of Wi-Fi in households in India as well as the ability of the apps offering free calls to scale bandwidth usage based on the connection only sets the stage for further growth of the trend. With the popularity of the new social messaging and calling platforms, the operators’ revenues are expected to take a huge plunge and it remains to be seen how they cope up with these changes in the future.
