Ring in the Free New

There are moments in time when a piece of management jargon like ‘disruptive innovation’ becomes all too real, and such a day happened early this week when WhatsApp enabled users to make voice calls. Right now, it is available on Android phones, but it is a matter of time before iPhones and other operating systems get the service. What is surprising, for anyone with a broadband connection at least, is the clarity and laglessness of the conversations, which are as good as any regular mobile network. And at no cost—if you have a sufficiently large data plan—even if you speak for hours to someone at the other end of the world.

It is hard not to feel sorry for mobile telecom service providers. The Economist recently published a graph that showed how, beginning 2011, WhatsApp had steadily and rapidly taken over messaging. SMS accounted for over 20 billion messages per day when Whatsapp began to creep up. By the middle of 2013, both SMS and WhatsApp accounted for around 20 billion. Today, 30 billion messages are sent daily on WhatsApp while SMS remains where it was. SMS seems headed for the dustbin of extinct technologies. Service providers like Vodafone, Airtel and Idea, which make part of their revenues from SMS, will have to learn to live without it. And now with voice calls on WhatsApp comes another existential threat.

Applications like WhatsApp or Viber that cater directly to consumers are called over-the-top (OTT) services. Recently, the Telecom Regulatory Authority of India (TRAI) invited feedback from the general public on how to frame policies for OTTs or ‘applications and services which are accessible over the internet and ride on operators’ networks offering internet access services e.g. social networks, search engines, amateur video aggregation sites etc.’ TRAI wants to know whether they need to be regulated. Many see this as a move that will eventually allow telecom service providers to charge for such services. And there is now a campaign to pre-empt that.

It is in the interests of consumers, who usually get these services free, to be part of this campaign and send TRAI emails opposing any such regulation. But they don’t really need to worry because any move to charge for it will prove pointless in the long term. If telecom companies start charging separately for data that is used for OTTs, then it is only going to be a matter of time before someone like Facebook, which owns WhatsApp, finds a way to deliver the application directly to phones instead of through a Vodafone or Airtel. If a call to the US can be available free, then forcing people to pay for it using government regulation seems to be the fastest way to lose customers and turn obsolete.

But that is the sadness of growing old; it is hard to think or behave like a start-up and compete on the latter’s terms. Instead, the stock response is to fall back on old practices to desperately retain whatever they have. That is why anyone who has ever tried to port his telephone number suddenly comes face to face with an evil nightmare called customer service.

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