Home Contents & Applications WhatsApp is likely to launch VoIP, and may announce more MVNO-type deals...

WhatsApp is likely to launch VoIP, and may announce more MVNO-type deals [Comment]

Social networking giant Facebook has swiftly closed its $19bn acquisition of WhatsApp, days after receiving approval for the deal from the European Commission (EC). EC approval was a significant hurdle for the merger, which received approval from the US Federal Trade Commission more than six months ago. The completion of the deal means that Facebook and WhatsApp can move forward on integration, although it appears that WhatsApp will remain autonomous – at least in the short term.


Comment below by Pamela Clark-Dickson, senior analyst, Consumer Services, Ovum:

The closing of Facebook’s acquisition of WhatsApp means that the social network owns three very successful messaging apps – its own Facebook Messenger, Instagram, and WhatsApp. Each app targets a different market segment, a factor that the EC referenced in its ruling when it stated that the merger would not stifle competition in the messaging apps market in Europe. The EC concluded that, while Facebook Messenger and WhatsApp are two of the most popular apps, consumers tend to use both apps, often alongside multiple other communications apps.

Since news of the acquisition broke in February, Facebook has significantly updated its own Facebook Messenger app, which looks set to become the company’s mobile platform for communications, content, and commerce. While no announcements have been made with regards to adding payments to Messenger, Instagram, or WhatsApp, Facebook has hired David Marcus, former president of PayPal, in June and, more recently, a hacker claimed to have uncovered a person-to-person payments feature in development for the Messenger app. Messaging apps such as Kakao Talk, Line, and WeChat are already generating substantial revenue by selling content and enabling payments on their platforms; it would be a logical next step for Facebook to do the same with Messenger.

However, it remains to be seen in what context Facebook would enable payments for WhatsApp. WhatsApp’s next major product release was to have been VoIP, but the company missed its 2Q14 deadline. With the deal closed, the onus will be on WhatsApp to launch the VoIP service. The company’s management has previously stated it does not intend WhatsApp to become a platform for content distribution, so for the foreseeable future WhatsApp will remain primarily a communications platform. But it is possible that Facebook could add a payments capability to WhatsApp, such that users could purchase add-on bundles of messages (or VoIP minutes) for contacting non-WhatsApp users, for example.

Perhaps more interesting, however, is WhatsApp’s experimentation with different ways of working with mobile operators; for example, in April 2014, German mobile operator e-Plus launched a WhatsApp prepaid SIM card, effectively enabling WhatsApp as an MVNO on its network. With 600 million monthly active users, which between them are sending and receiving over 60 billion messages a day, WhatsApp has a lot to offer potential mobile operator partners as an MVNO – assuming its partnership with e-Plus proves successful.

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