Did SingTel just make peace with WhatsApp?

Did SingTel just make peace with WhatsApp?

J. Angelo Racoma 7, Aug 2013Corporations 

SingTel partners WhatsApp to offer prepaid plans as low as US$0.40 daily. How does this relate to the competitive dynamics between SMS and over-the-top apps?

Both SingTel and StarHub, two of Singapore’s telcos, announced early this year that they will be taking the fight to WhatsApp by building their own messaging app. An announcement that SGEntrepreneurs’ editor, Terence Lee, said made no sense. The popular cross-platform instant messaging service, that has recently surpassed 300 million users globally, is one of the reasons that telcos are seeing their revenues, especially from SMS and MMS services, declining. But it seems like a middle ground may have been found.Yesterday, SingTel announced its latest data plans for prepaid users, which highlight the use of Opera and WhatsApp. SingTel users on prepaid plans can pay as low as S$0.50 (US$0.39) per day to send messages and exchange photos and videos with other WhatsApp users from around the world. Users can also opt for S$3 (US$2.36) for a seven-day plan or S$6 (US$4.73) per month. WhatsApp plans are capped at 1GB of usage per day, which should be more than enough for messaging and exchanging photos and videos.

Meanwhile, SingTel is also pushing its Opera Mini Surf & Mail plans, which enable users to browse the web with Opera’s mobile-optimized browsers. Aside from paying the low prepaid fees — S$1 (US$0.79) for a one-day plan, S$5 (US$3.94) for seven days or S$10 (US$7.88) monthly — Opera also offers faster access to websites with its compression and optimization technology. As with the WhatsApp plans, data usage with Opera Mini is capped at 1GB daily.

SingTel views this as an equalizer, given that postpaid users already have generous data allocations. “Many of our prepaid mobile customers today are active on social media and have embraced web-based apps to communicate and organise their lives,” said Johan Buse, vice president for consumer marketing. “The plans we have launched today will provide our prepaid customers with a similar level of convenience at an affordable price to meet their online needs.”

Carriers vs. chat apps?

Instant messaging apps have grown to be a lucrative business, with the likes of LINE, Kakao Talk, WeChat and WhatsApp boasting users in the hundreds of millions. In fact, carriers have felt threatened by the rising popularity of chat apps, that some have even raised their SMS fees to compensate for the loss in business in the face of social media and messaging apps.

SMS is not going down without a fight, though. e27 earlier sought insights from mobile services provider Acision, which had the opinion that carriers might be moving toward the right direction in building on the GSM Association’s Rich Communication Services (RCS). “Operators in the region are taking small steps in the right direction with their own OTT apps. When RCS will be fully adopted and deployed, it will bring back control to operators and provide seamless connection between networks while offering rich messaging experience to users,” said Acision’s Michael Frausing.

In South Korea, carriers are already implementing their own flavor of RCS with Joyn, which is seen as a way for telcos to take on IP-based chat apps. However, observers agree that it’s still early in the game to see whether carriers can take back the messaging business, similar to how the SMS standard made pagers obsolete in the early 1990s.

Going beyond dumb pipes?

At Echelon 2013, one of the topics explored in the panel discussions was how carriers can move beyond the “dumb pipe” model. While telcos are traditionally seen as direct service providers to consumers, they are increasingly becoming simple providers of the infrastructure upon which IP-based applications are coursed through. The carrier responses vary, though, with some simply banking on newfound revenues from data usage, while others take a more proactive approach by offering competing or complementary services that go alongside OTT apps.

It’s a matter of “fight, partner, or imitate” and in the case of SingTel, WhatsApp and Opera Mini, partnering (and perhaps supposedly sharing the revenues) is the way to go.