Finances of telcos to worsen as calls on WhatsApp are now free

Finances of telcos to worsen as calls on WhatsApp are now free

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The financial woes of telecom companies in the country is set to further deepen with the onset of free calls on Whatsapp, the most common application used in sending messages, pictures and videos by people using smartphones.

Presently, all the six foreign owned telecom companies in the country are reeling under serious challenges from the dwindling revenues from voice calls as against the rising cost of infrastructure which requires frequent updates and upgrading to deliver quality services to customers.

Already the introduction of mobile apps such as Viber, Instagram, telegram among others have impacted negatively on the revenues received from messaging on-net (one network to the same network) or off-net (one network to another network).

On grounds of anonymity some of the players in the industry refused direct comments except to say “we are dead.”

A Technology Analyst and Digital Marketing Strategist, Mr Maximus Ametorgoh, told the GRAPHIC BUSINESS that the situation was no good news for the telcos.

He said because of the large number of people using smartphones in the country and on Whatsapp, many would shift their attention to make calls at a cheaper rate than to call on the regular line which is more expensive. Most smartphones were sold with pre-installed WhatsApp app. Others used the app as benefit offering to sell their brand of smartphones.

According to him, although the calls on Whatsapp will require some data, the cost of data is still cheaper and will be more attractive.

WhatsAapp calls

Mobile World, an international IT and telecom news portal, reported that the long-anticipated free voice calling service had now been added to the Android version of WhatsApp, putting it in direct competition with the likes of Skype, Viber and Apple’s FaceTime.

The feature had initially been beta tested on a small number of users, after which it was available on an invite-only basis. Activation is done when a voice-activated WhatsApp version calls another non-voice-activated user on the app. It is instant.

Calls can be made to a contact while chatting with them or by going through the contacts list within the app. If the user doesn’t have a version of the app supporting the feature, the caller is notified.

A tab for calls will appear next to the chats and contacts tabs, offering a list of incoming, outgoing and missed WhatsApp calls.

WhatsApp calls will also allow users to use the speakerphone and have mute options, as well as call duration log.

However, emergency service numbers cannot be dialled.

Although WhatsApp has made no official statement about the news, the feature is also expected to come to iOS versions of the app, based on a comment made by co-founder Brian Acton at the Facebook f8 conference earlier in March.

In January, WhatsApp, which said it had hit 700 million monthly active users, introduced a web-based version of the messaging service, on which users could continue conversations they had on their phones in a desktop computer browser.

Consequences

Although it may take a little while for many to get hooked to it, the Whatsapp calls will further worsen their plight and even force some, particularly the late entrants, to fold up.

Others might also be forced to downsize drastically in other to cut cost and remain profitable or at best break even.

Already, some are contemplating a retrenchment exercise because of the worsening economic situation in the country where the macroeconomic fundamentals are going off track.

The severe energy crisis has increased the cost of operations of many of these telecom companies by more than 100 fold and deeply eating into the bottom line.

At a time when it was expected that the petroleum prices in the country would be significantly reduced because of the drastic drop in crude oil prices on the international market after prices plummeted from US$114 to the present average of US$50 per barrel, the government decided to use the windfall to defray what it described as accumulated debt because of what it claimed to be subsidies.

The situation has forced many companies to the brink of collapse and the telcos are not spared in that ordeal as they seem to be feeling the pitch because of the heavy dependence on gas oil to power their generators powering their thousands of cell sites across the country.

The situation is also being aggravated by the instability of the local currency against the major foreign currencies, particularly the United States dollar. For instance the cedi is trading at Ghc3.7 to US$1 having dropped to about GhC3.2 to the US$1 as at the end of the last quarter of 2014.

Presently, the government derives a lot of tax revenue from the telcos because of the money they make in the industry. Although those days of glory are no more as was the case in the past, the revenues from the government will be seriously affected because the calls on Whatsapp cannot be taxed as in the case prior to that.

Source:Graphiconline

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