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INDIAN (T)

Data drive results in a surge of app-based calls like WhatsApp

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For the time being, experts say telcos don’t need to lose sleep over the growth of OTT traffic.
For the time being, experts say telcos don’t need to lose sleep over the growth of OTT traffic.

Indians are talking more on the phone than ever before. And while a large portion of these calls continue to be made over traditional networks, the popularity of calling apps such as WhatsApp is growing at a fast clip, thanks to the improved quality and plunging data prices.

According to data from Warp Speed Reads, a telecom and technology research firm, call volumes on WhatsApp and other app platforms jumped by 87% to 86.4 billion minutes in 2017 over 2016. This was preceded by a 51% growth in 2016 over 2015.

In comparison, call traffic on traditional networks rose on a year-on-year basis by 28.2% to 3.04 trillion minutes in 2017 and by 5.35% in 2016.

“There is a bump in overall calling traffic in 2017, which includes (4G) LTE calling traffic. There is growth not only in the total volume of calls but also minutes per subscriber per month… clearly the Reliance Jio effect has helped telco calling traffic,” said Warp Speed Reads founder and former Ovum analyst Neha Dharia.

Deloitte Haskins and Sells partner Hemant Joshi said a section of consumers has taken to making (data, or app) calls from Wi-Fi networks.“The use case (on app-based calls) would have increased in the past months with the number of call drops on traditional voice networks increasing, as carriers move to upgrade their networks to 4G,” said Joshi.

But he added that the share of smartphones in India is only 35-38%, with the balance being feature phones. And as older operators Bharti Airtel, Vodafone India and Idea Cellular try to match Jio’s free voice and ultra-cheap offers for both smartphone and basic phones users, there has been an increase in their network traffic.

In the quarter ended December 2017, the number of minutes used on Vodafone India’s network was up 8% sequentially, Idea’s was up 11%, and market leader Airtel’s rose 13%. For Jio, which started its services in September 2016, the minutes of use rose by 29.5% on quarter.

But that would have been higher still, had people not had the option of app-based, or data calls, mainly on WhatsApp, with the price of the mobile internet having plunged some 90% in the year, say analysts.

Telco Minutes may plateau out in 2019 and 2020

In addition to plunging data prices and improvement in calling clarity, some also use OTT or app-based calls as they ensure privacy and cannot be tracked, said Navkendar Singh, research director at International Data Corporation India. “We can confirm that voice and video calls are on the rise,” a WhatsApp spokesperson said in response to ET’s queries, adding that since it launched voice calling in 2016, it has worked continuously on improving the quality and reliability of calls.

“Last month, we added a button that makes it possible to easily switch between voice and video without interrupting the call,” said the world’s largest messaging platform, which has India as its largest market with over 200 million users.

Over a billion Indians use mobile phones Interestingly, globally, cross-border OTT traffic has already surpassed carrier traffic — 552 billion minutes on average in 2016 for apps compared with 546 billion minutes of carrier traffic — as per data from TeleGeography. “As traditional carrier traffic has slumped, OTT traffic has risen to fill the void,” the research firm said in a blog post last month.

For the time being, experts say telcos don’t need to lose sleep over the growth of OTT traffic. “The rise in OTT calls is to a limited extent adding to the data revenue of telcos, as all OTT calls use data,” said Mritunjay Kapur, TMT head for KPMG India,” said KPMG India TMT head Mritunjay Kapur.

Warp Speed Reads’ Dharia expects telco minutes to grow slightly in 2018 and then plateau out in 2019 and 2020, with more subscribers opting for app-based calling, given regulations, caps on unlimited free minutes in traditional calling plans and the Indian customer warming up to mobile internet services. In comparison, app voice call volume is set to grow by 39% on year in 2018, 44% in 2019 and 46% in 2020.



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