Safaricom and Airtel – be worried, WhatsApp update enables calls

The reasons people haven’t taken the VoIP calls seriously in Kenya and elsewhere are mainly two:

  1. Lack of stable and reliable Internet
  2. Lack of a VoIP App integrated with the dialer

Since I wrote that post a lot of improvements have been made on the quality of Internet available especially via Airtel Kenya and Orange. Safaricom’s Internet is still crappy but with the rollout of 4G LTE we hope that in the next one year the quality will be top notch. To clarify, it is not that the Internet in Safaricom is any worse that what Airtel and Orange are providing, but the fact that they have 70% of Internet traffic means their Internet infrastructure is always overloaded (that’s not an excuse though, as Safaricom nets in over 20 billion shillings each year, their priority ought to be providing services of the highest of quality).

With quality improvement on Internet services, I do not expect phone users to blame quality of Internet on their inability to use VoIP calls to save a huge chunk of money on calls.

The other problems has been lack of VoIP App that is directly integrated with the phone dialer. Although when you install one of the VoIP Apps in Android, the first time you make a call the phone will ask whether you want to make that call via cellular network or via Skype, for instance. Most people don’t choose the Skype call as the person to be called is probably not in Skype and even so, Skype would want you to pay extra (though cheaper) to terminate that call on the recipient’s cellular number.

This is where the WhatsApp update changes the game. Even though WhatsApp is not integrated with the dialer to make it the default calling platform, the global usage of WhatsApp surpasses all the existing VoIP Apps in the market, even Skype. Today Skype boasts of 280 million active monthly users whereas WhatsApp is already recording over 600 million active monthly users. In Kenya, the way people use WhatsApp is so intense such that anyone using his/her smartphone near you is probably in WhatsApp. I bet more than 50% of your contacts are already in WhatsApp.

The importance of the WhatsApp update is so important to users to the extent that the announcement has made WhatsApp become a global trending Twitter topic as at the time of penning this article. It is therefore expected that majority of people will move away from normal cellular based calls to VoIP via WhatsApp.

The expectation that many will stop using the cellular based phone calls and turn to VoIP courtesy of WhatsApp should get the telecos worried. This is because, if we use Safaricom as our bench mark, we find that by half year 2015 financial report, 55% of Safaricom’s revenues came from voice whereas data contributed 16% of the revenue. It is also important to note that by the time of the report, slightly over 10 million customers (48%) were active data users, 3.1 million of which were already on smartphones.

If we assume that most of those with smartphones will almost completely switch from making calls via cellular to WhatsApp, and further assuming that these smartphone users are the key contributes to both voice and data revenues, then as much as we would expect the data revenue to increase thanks to increased WhatsApp usage, the drop in voice will significantly impact the total revenue. A high rate adoption of WhatsApp’s VoIP service may see Safaricom total profits drop from double digit billions to single digit billions in the financial year 2016-2017.

Shift on service preference

The WhatsApp update is likely to create a big shift in service preference in the telecommunication sector. Currently data and text are being treated as service add-ons. For example you’ll realize that many of the promotion offers are tailored to woo subscribers to spend a given amount of money per day in order to receive “free data” and “free unlimited SMS” as value adds.

When and if WhatsApp in app voice call picks up, expect to see the telecos refocus to give priority to data. One of the changes we might see is increased charges on data and also increased promotions based on data usage rates.

Not yet ready

Do not be excited though, saving Shs 10K and more per month on voice calls is a dream you have to wait a bit longer to realize. After updating my WhatsApp I made a number of calls, and except for one call that dropped just before I said bye, the other calls were poor, very poor. This is because of fluctuating Internet quality both from my side and on the side of the recipient. WhatsApp will also have to refine their algorithm as there is noticeable time lag when making the call.

The impact of quality of Internet on the success of VoIP has already been discussed above. What is important to note is that the telecos can intentionally retain the current quality of Internet to discourage you and me from using WhatsApp calls. If we want to enjoy the service seamlessly, it is up to us to stand up and demand quality Internet services from the telecos, starting today.

In the meantime, download the WhatsApp update and let us know how your VoIP experience on WhatsApp feels like.

[Later addition] WhatsApp take away it’s most annoying feature

I have just realized that WhatsApp has also taken away its most annoying feature that I described in this article. If you haven’t updated WhatsApp, you’ll realize that if you are in contact list you cannot simply go back to any other screen without losing site of the contact list. If for example you were scrolling down, and you reached the middle position, going back to the contact list would take you back to the beginning of the list, very annoying.

The WhatsApp update has taken this away and today you have three tabs at the home screen namely Call, Chat, and Contacts. This means you can easily access contacts, calls and chat easily from any screen without losing track. Very beautiful.


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