Facebook rolled out free voice calling within its updated Android Messenger app last week. The company will also roll out free voice calling into its 450 million WhatsApp customers sometime in the next three months. Will the expanded deployment of voice calls threaten Microsoft, traditional carriers, or both?
Earlier this year, Facebook introduced free voice calling (i.e. if you're on Wi-Fi or a data connection on a cellular device) in Apple iOS. With Android last week and Microsoft Phone coming soon along with WhatsApp, a lot of people will get access to a new and convenient method for voice communication. Not all of them will use it, but the budget conscious—and those who like the convenience of being within Facebook to start a conversation when they spot a friend online—will.
If you are Microsoft, you have Skype and its IM/presence/video functionality, but it's standalone. Good when you need it, not so good if you are catching up with friends and family on Facebook and spot one of them online you'd like to talk to. And there's the whole SkypeOut IP to POTS functionality that isn't going away, but has to be shrinking every time a new smartphone user starts increasing broadband time over vanilla voice calls.
Image via JuliusKielaitis / Shutterstock.com
At some point, Microsoft has to consider a Facebook/Google+ type of service, and there will likely be one either created or acquired as the company expands into developing markets around the globe. Don't expect any fast moves on this front, but someone has to be thinking about increasing "stickiness" for Microsoft cloud users, especially in a way to leverage its strengths in the Xbox gaming arena.
Traditional carriers have to view this as another glass half empty/half full. It's another shift of traditional voice traffic to lower revenue broadband bits, but Skype's been doing that for years. Copper-loathing carriers—I'm looking you, Verizon—might like this because it reduces the use of POTS more, but I think the trend to landline abandonment has to be slowing by this time.
However, carriers might be more concerned about a "critical mass" effect when their collective customer bases start using a combination of Facebook Messenger, Skype, WhatsApp, and whatever other Skype-like over-the-top (OTT) carriers you want to throw into the bundle. Individually, each service nibbles away at revenues. Together, they start to make a significant impact of voice shift to data.
You can't really say GSMA has created a firebreak with Joyn and RCS at this point. France Telecom's Libon might be classed as the most successful traditional carrier OTT play (yes, you have to read it out loud and think about it), but that's not saying much in the larger scheme of things.
It's hard to say what carriers should do, since they have been ineffective to mount a solid defense against OTT. But they are going to have to do something other than remain passive and simply think they're going to make up revenue by hiking data and service prices on their existing customers.
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