How much would you pay to see a Telco executive sweat?
The world is still in shock over the $19b sale of WhatsApp to Facebook and from whatever angle you look it appears they paid too much money. Here is one angle that may make you feel more comfortable with the sale price?
Global spend on traditional operator messaging services, including SMS and MMS, declined for the first time in 2013. The 4% decline in revenue is expected to grow to 17% by 2017 as a result of over-the-top (OTT) messaging services such as WhatsApp which equates to $23 billion.
So this drop in revenue caused by OTT messaging services would have to be causing some concern amongst Telco executives inside their boardrooms across the globe as they consider strategies to combat this disruption. They have to make a decision, do they develop their own IM services or choose not to compete and instead encourage their adoption so they can benefit from the increase use of mobile data?
So consider the fact that Facebook has now got their hands on the fastest growing OTT messaging service on the planet, would the collective stress of each of those executives being forced to deal with the impact of this acquisition on their industry be worth $19b?
If you live in countries like Australia where SMS is bundled as part of the packages you purchase with all other mobile services you would be thinking that while there may be cause for concern the sale has not caused enough stress in the boardroom to combat the stress we have had to endure from having to deal with their poor customer service over the years.
This is where it gets interesting, in the coming months WhatsApp will add voice calling. So add all this together and you have to think that Telco’s across the world have just seen revenue growth from voice calls vaporise in front of their eyes, making their service bundles less attractive.
Now if you think about it from this angle that makes $19b seem very cheap.