I recently had a conversation that reminded me just how limited internet usage is in Zimbabwe. A mix of factors has combined to make WhatsApp the extent of internet use for most people.
Economic challenges that have persisted for decades mean that even affording a $1 weekly WhatsApp bundle is a privilege. Having WiFi at home is an even greater luxury.
Why WhatsApp Took Over
WhatsApp, founded in the U.S., has been more popular outside its home country. This is primarily because its original selling point—a simple and cheap way to text—wasn’t a big deal in the U.S., where mobile operators offered unlimited texts at relatively affordable rates.
In Africa, however, mobile operators charged arms and legs for SMS. Back in 2011, a single 160-character SMS in Zimbabwe cost an astounding 9 cents. For $1, you could only send 11 texts.
Compare that to today, where $1 buys practically unlimited WhatsApp texts for a whole week, including the ability to send images and videos (though heavy media use may deplete the bundle).
In its early days, WhatsApp partnered with mobile operators worldwide to promote internet adoption by boosting data demand and revenues.
It all made sense on paper but around the world, not all mobile operators were on board initially. It’s understandable, it was short-sighted but it was understandable. SMS was a huge revenue earner, I mean a dollar for 11 texts says it all.
So, they continued charging exorbitant fees for SMS even as WhatsApp continued to gain popularity. I guess the thinking was, ‘Let’s get the most we can from SMS before its eventual decline.’
The Fall of SMS Revenue
After WhatsApp killed SMS revenue, we then saw those SMS charges slowly drop. Today, Econet will charge you $2.90 for 1,100 SMSes. That works out to $0.0026 or 0.26 cents per SMS. Contrast that with the 9 cents they charged in 2011. That’s a 97.11% reduction in price even in inflation-ravaged Zimbabwe.
I wonder how fast WhatsApp’s uptake would have been in the market if mobile operators offered these kinds of prices for SMS back then. I still think WhatsApp or another internet-based instant messaging app was inevitable. However, it could have taken longer for WhatsApp to completely take over. However, it could have taken longer for WhatsApp to completely take over.
SMS in the U.S. vs. Zimbabwe
Compared to the rest of the world, SMS usage in the U.S. is relatively high. This is partly due to the dominance of mobile operator-based messaging services. SMS was simple, available on every phone, and cheap in the U.S., which is why usage is only slowly decreasing even with apps like WhatsApp and iMessage becoming popular.
Could that have been the case too in Zimbabwe? I would like to think so. SMS usage would definitely have been higher if mobile operators had adjusted their prices quickly to deal with the emerging threat.
Voice
When WhatsApp introduced voice calling, we knew that very moment that mobile operator voice call revenue was going to take a hit. It would continue to increase indefinitely because regular old calls won’t be going anywhere but their growth would slow.
So far, while voice revenue was obviously affected by WhatsApp usage, Econet, Zimbabwe’s largest operator, has managed to limit the damage by restricting WhatsApp calls.
WhatsApp calls can’t be made using a WhatsApp bundle; users must purchase general data bundles.
So, users can do their little voice note shenanigans but when they want to talk it out with someone, only a call will do. If a call has to happen, it will be a regular old call for most people.
So, this has no doubt helped slow the move to WhatsApp for voice calls.
Econet’s $1 WhatsApp bundle gives you 120MB, which allows for approximately 384 minutes of WhatsApp calls (at 0.3MB per minute). By contrast, a $1 weekly voice bundle provides only 40 minutes of regular calls and 50 SMS messages.
For budget-conscious users, WhatsApp is the clear winner.
However, for Econet, if the other user you’re calling is also an Econet user, the WhatsApp call would effectively be 192 minutes since you need both parties to have a bundle of their own. It’s still cheaper than the regular call but it’s something for Econet.
So, I wonder if Econet’s strategy here will yield the intended results, which I imagine are to safeguard voice revenue for as long as possible. While data usage will increase the more people use the likes of WhatsApp calls, the revenue gained is at the expense of more lucrative voice revenue.
That’s unless data usage increases beyond just WhatsApp, which tends to happen the cheaper internet access gets. So, while the natural instinct is to protect today’s voice revenue, it risks repeating the mistakes made with SMS.
The question remains: should Econet focus on restricting WhatsApp calls or make traditional voice calls more competitive in price? Only time will tell if Econet’s approach will prove successful.
What’s your take?