Voice market fragments further: VoIP added to Facebook Messenger

Thursday 10 January 2013 | 12:44 CET | Market Commentary

Facebook is adding VoIP to the Facebook Messenger for mobile phones. The service is available initially in Canada, as a test for iPhone users. The service works both over Wi-Fi as well as 3G and 4G networks. In addition, it's added voicemail worldwide to the service, both for iOS and Android users. See our earlier commentary: Facebook searches for killer app with voice calls

A complete fragmentation of the communication market is underway. Text-based communication has been around for some time, through SMS and later e-mail and chat/IM. The move to mobile was nearly seamless, underlined by the large number of apps available for both voice and text. Notably a number of those apps, such as Google+ Messenger and Tango, support both chat and (video) calls. Facebook adding voice to Facebook Messenger is as such no surprise. The next logical step, not just for Facebook, is to add video calls, as this is also creates room for placing ads. 

This is not the end of the developments. Sweden-based Rebtel ("the world’s largest mobile VoIP company after Skype") recently launched a SDK called the Rebtel Voice Platform. This allows developers to include voice in any app. The WebRTC technology under development promises something similar: calling from within a web browser, making voice possible on any website. AT&T is using this technology to make its customers available on different devices than their usual mobile phone. 

This all leads to the further commoditisation of voice traffic, and providers (both traditional and OTT) will see their revenues decline. Rebtel has chosen a smart path, as its SDK, which it is unlikely to be giving away free, creates a new revenue source. 

The fragmentation and commoditisation will over time result in takeovers, if not a shake-out of the market. Independent players are vulnerable, as their margins are under pressure. For the big internet players, voice is a nice add-on, which increases customer loyalty. The costs can be covered through cross-subsidies - even a 'free' Facebook-to-Facebook conversation costs money. Video calls or a SDK can also add new revenues sources. 

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