Singapore - US-based software startup WhatsApp, the
fast-growing mobile messaging service, denies it's a threat to telephone
carriers and the cash they earn from SMS messages.
Instead, its co-founder Brian Acton said in a rare interview
that WhatsApp was helping carriers move their customers to data packages that
would, in the long term, prove more profitable.
"I view it from the perspective that we're facilitating
a broad movement to data plans and the entities that provide those plans are
the carriers, so they stand to benefit quite substantially," he said.
"It's all about the data."
WhatsApp is the most successful of a number of applications
that users can download to their cellphones to share messages, photos and
The applications are popular because while many carriers
charge for individual text or SMS messages, WhatsApp messages travel via
carriers' generous or unlimited data plans.
According to internet traffic monitor Allot Communications,
WhatsApp accounted for 18% of instant messaging bandwidth in 2011, up from 3%
There is little question that the growth in applications
like WhatsApp is lowering SMS traffic. Stefan Zehle, CEO of UK-based Coleago
Consulting, wrote in a blog post in January that mobile operators in Taiwan
reported a 12% decline in SMS messages in 2011, a drop he attributed directly
to users switching to WhatsApp.
The impact on the bottom-line is stark: Ovum, a technology
research consultancy, calculated in a report released in February that
operators lost $13.9bn in SMS revenue last year.
WhatsApp doesn't give out much in the way of data. Acton
repeated two figures he said demonstrated its stellar rise: WhatsApp handled 1
billion messages a day last October, two years after its launch as a messaging
service. Four months later it had reached 2 billion messages a day.
He said that while he was "happy with all countries of
the world", growth had been particularly strong in the Netherlands and
Spain in Europe, Saudi Arabia and Kuwait in the Middle East and Hong Kong,
Taiwan and Singapore in Asia.
WhatsApp is keen to emphasise that it's more than a way to
send SMS messages cheaply.
"It's more about the service we provide, including
photos and multimedia," said Julia French, WhatsApp's public relations
Acton also emphasised that WhatsApp was available on most
mobile operating systems, including not only BlackBerry, Android and iPhone
smartphones, but devices running the Symbian 60 software that powers many Nokia
More recently WhatsApp has added applications for Microsoft
Windows 7 phones and even the earlier 13-year-old S40 Symbian platform, Acton
said. More than 60% of Indonesian phones run a version of Symbian, according to
internet measurement website StatCounter.
By aiming at all devices, whether higher-end smartphones or
more basic feature phones, WhatsApp offers more than a service like RIM's
BlackBerry Messaging, which only works on RIM's own phones, or software, which
only works on more expensive devices.
WhatsApp, Acton said, has "created a very accessible
network in all countries of the world".
By reaching such a broad swathe of users, WhatsApp is
forcing operators to adapt. This is particularly the case in Southeast Asia
where SMS has been popular, and hugely lucrative, and where users are price
sensitive, said Mar Pages, Singapore-based principal at telecoms consultancy
"Managing the transition away from high-margin products
like SMS is a top priority for most of the mobile operators in the region as
part of the wider effort to monetise the data opportunity," she said.
Unusually for startups, WhatsApp does not rely on
advertising. Instead it charges users for the application after the first year
Acton said the company had recently reduced the cost of the
app on all platforms except for Apple's iOS from $2 to $1. The company has been
profitable year-on-year from late 2009, he said, declining to give further