Facebook inc recently introduced the ability to make voice calls directly on its Whatsapp mobile application. This is currently available on Android OS and soon to be made available on iOS.
What this means is that mobile users with the updated app can now call each other by using available data channels such as Wi-Fi or mobile data. Going by a recent tweet by a user who tried to use the service on Safaricom, the user claims that they made a 7 minute call and consumed just about 5MB’s of data. If these claims are true, then it means that by using Whatsapp, a user can call anyone in the world for less than a shilling a minute. This is lower than most mobile tariffs.
Is this a game changer?
Depends on who you ask. First lets look at what happens when you make a Whatsapp call. When a user initiates a call to another user over Whatsapp, both of them incur data charges, in the case of the twitter user I referred to above who consumed 5MBs, the recipient of the call also consumed a similar amount of data for receiving the call. If it so happens that both callers were on Safaricom, then just about 10MB’s were consumed for the 7 minutes call. The cost of 10MBs is close to what it would cost to make a GSM phone call for the same duration of time anyway. Effectively, to now receive a Whatsapp call, it is going to cost the recipient of the call. This is unlike on GSM where receiving calls is free. When the phone rings with an incoming Whatsapp call, the first thought that crosses a call recipients mind is if he/she has enough data ‘bundles’ on their phone to pick the call. The danger is if there is none or the data bundle runs out mid-call, the recipient will be billed at out of bundle rate of 4 shillings an MB. Assuming our reference user above called someone whose data had run out, Safaricom will have made 5 Shillings from the 5MBs and 28 shillings from the recipient. A total of 33 shillings for a 7 minute call translating to 4.7 shillings a minute which is more than the GSM tariffs.
This effectively changes the cost model of making calls. the cost is now borne by both parties, something that might not go down well with most users. I have not made a Whatsapp call as my phone is a feature phone but I believe if a “disable calls” option does not exist, Whatsapp will soon introduce it due to pressure from users who do not wish to be called via Whatsapp due to the potential costs of receiving a call. That will kill all the buzz.
Will operators block Whatsapp calls?
It is technically possible to block Whatsapp texts and file transfers using layer 7+ deep packet inspection systems such as those from Allot’s NetEnforcer and Blue coat’s Packeteer. I believe an update to detect Whatsapp voice is in the offing soon and this will give operators the ability to block Whatsapp voice. The question however is what will drive them to block it? MNO’s will have no problem allowing Whatsapp traffic as it wsill mot likely be a boon for them if most of the calls are on-net (They get to bill both parties in the call). If however most calls are off-net (Like those to recipients on other mobile networks locally or international), then MNO’s might block or give lower QoS priority to make the calls of a poor quality to sustain a conversation. They might however run into problems with the regulator should subscribers raise concerns that they think the operators are unfairly discriminating Whatsapp voice traffic. Net neutrality rules (not sure they are enforceable in Kenya yet) require that all data bits on the internet be treated equally, it should not matter if that bit is carrying Whatsapp voice, bible quotes or adult content. This will mean that operators can be punished for throttling Whatsapp voice traffic in favour of their own voice traffic. This therefore presents a catch 22 situation for them. What they need to do is come up with innovative ways to benefit from this development like offering slightly cheaper data tariffs for on-net Whatsapp voice to spur increased Whatsapp usage within the network (and therefore bill both participants).
Worth noting is that it costs the operator more to transfer a bit on 3G than it does on 4G. Operators who roll out 4G stand to benefit from Whatsapp voice as they can offer data at a lower cost to them and this benefit can be passed down to subscribers. The fact that voLTE is all the rage now, Whatsapp voice can supplement voLTE and can even be a cheaper way for operators to offer their voice services on their LTE networks without further investment in voLTE specific network equipment.
In short any operator who wants to benefit from Whatsapp voice has to go LTE.
A recent research article by Khynghan et. al, in a paper titled “Mobile Data Offloading: How Much Can WiFi Deliver?” estimates that about 65% of mobile data can be offloaded onto Wi-Fi networks. By this they mean that much of the data generated by users browsing the Internet via mobile devices can be rerouted from the mobile 3G network onto Wi-Fi networks.
With the explosive growth of data consumption by mobile devices in Kenya, network operators have several strategies aimed at meeting the unprecedented growth. These strategies include 3G and 4G network expansion to carter for this growth, adoption of new technologies such as 4G-LTE and use of new network architectures that maximize network resources. Unfortunately, with declining or flat revenues and margins from unit data consumption, nearly all these strategies are expensive and eating into the already declining margins.
Wi-Fi offloading is becoming an attractive alternative path for operators to cope with the increased traffic from Smart devices. In the US, smart devices account for only 3% of all mobile devices but contribute about 40% of all mobile data traffic. With majority of these devices having Wi-Fi capability, offloading their traffic onto Wi-Fi network from 3G presents a very viable alternative.
Wi-Fi offers the following advantages that makes it a very likely alternative to the more expensive roll-out of 3G and 4G especially in densely populated areas:
- It is much cheaper to roll-out Wi-Fi hotspots around a city compared to a 3G or 4G network
- Wi-Fi networks are very scalable, it can take months to expand a 3G network but few days to expand a Wi-Fi network
- A Wi-Fi network, if well designed can offer much higher throughput speeds than existing mobile networks
- A smart device connected to a Wi-Fi network is more efficient on battery conservation than one connected to a mobile network.
Are users really Mobile ?
There is a general misconception that mobile devices are used by users in motion, a lot of attention has therefore been paid to ‘seamless’ station to station hand-off of a mobile voice and data connection. In a paper by University of Malaga, University of Limerick and Nokia Siemens Networks the authors show that less than 3% of calls in the world are actually handed off from one base station to another. This shows that majority of “mobile” users are stationary when making calls or browsing the web. This percentage is bound to be lower in a country like Kenya meaning that deployment of Wi-Fi networks that lack hand off capabilities possessed by 3G networks will not impact user experience and operators will not compromise quality of service.
Mobile operators can spur the usage of Wi-Fi networks by first educating users on the fact that majority of mobile devices give higher priority to a Wi-Fi network than a 3G network, i.e. if your phone is connected to both Wi-Fi and 3G, it will by default send data over the Wi-Fi network and revert to 3G when there is no Wi-Fi coverage. The operators can also send over the air (OTA) Wi-Fi configurations and settings to enable mobile devices automatically connect to the providers Wi-Fi network when it detects a good signal. The operators can also spur usage of Wi-Fi by mobile users by offering better data tariffs for users on Wi-Fi than those on 3G/4G.
Statistics from the research by Khynghan et. al. show that 3G to Wi-Fi traffic offloading tests done in New York City showed that over 65% of 3G mobile data was offloaded onto Wi-Fi networks by smart devices leading to faster browsing speeds and a 55% battery saving as devices no longer need signaling power. (be it legacy ss7 or SIGTRAN).
In these days of shrinking revenues and skyrocketing costs, Kenyan mobile operators should give Wi-Fi a thought if they are to meet their customers expectation of quality service and give their shareholders return on their investments.