Ovum has already commented on the loss of SMS revenues due to the viral growth of social messaging players such as WhatsApp. The impact of these OTT players will cost operators $23 billion in SMS revenues in 2012, and that figure is expected to rise to $54 billion in 2016.
We have argued that one way for operators to effectively combat this threat is to partner with OTT players, and in the past few months partnerships have begun to emerge between operators and social messaging players.
KDDI and Line were the first to announce a partnership, in July 2012, while 3 Hong Kong announced the “WhatsApp Roaming Pass” in September 2012. The latest initiative comes from Reliance Communications in India, which has launched a new data subscription plan, the “WhatsApp plan”.
These partnerships not only increase stickiness among the operators’ subscriber bases, but are also becoming a potential revenue opportunity.
Operators attempt to monetize social messaging
Partnering with social messaging players is a double-edged sword for operators. Although it will further popularize OTT services and dampen SMS revenue growth, it will allow operators to remain relevant in the messaging industry, and to try to grow revenues through social messaging subscription plans.
Hong Kong operator 3 has signed an exclusive partnership deal with WhatsApp, whereby its customers will pay $1 (HK$8) per month to use WhatsApp in Hong Kong and abroad. They will have free access to WhatsApp services such as photo and location sharing, and using the service will not impact subscribers’ data usage while roaming.