Summary

Surge in fragmented communication due to rapid adoption of smartphones has

given wide variety to the consumers over traditional voice and messaging
services provided by operators. While OTT services are encroaching the revenues
of operators gradually, apt business models that are both adaptable and
profitable is a need of the hour for telecom operators and partnering will be the
best way to do it.
Vimplecom with its partnership with Whatsapp is one such effort to monetize
and leverage this opportunity. This partnership is an evident instance of win-win
partnership between a fixed player and an OTT player.

Description & Rationale behind the deal

This deal is seen as a strategic effort for both the players to retain and add new
subscriber base. Plethora of opportunities are being opened up by embracing
this business model for both the players in terms of revenue generation and
providing a seamless communication opportunity for the users.

Vimplecom View

With consumer behavior shifting towards more data usage, which is quite
evident from the data revenue of Vimplecom for Pak and Bangladesh it became a
paramount priority for the company to partner an OTT player to leverage this
opportunity. Due to this partnership not just the acclivity in data revenue was
observed in both the countries but also the engagement time i.e. (MOU) has seen
an incremental growth. The bundled tariff plan will also provide an opportunity
to stabilize the churn rate and add new subscriber base.
Deal was signed during the 3Q13 and from their rise in share of data revenue in
total operating revenue has been 3.9% and 4.5% in 1Q14 and 2Q14 respectively,
indicating a growth in total revenue of Vimplecom from both the business unit
viz Pak and Bangladesh. With the advent of 3G services data revenues are
expected to grow exponentially and partnering with Whatsapp will drive the data
usage for the same.

Whats there for Whatsapp! (Whatsapp View)

OTT services and operators go hand in hand, but their competitive instinct may
vary to a great extent. OTT market being highly competitive and understanding
the user behavior and their preferences is of vital importance. Vimplecom could
provide critical data like customers demographic, weblogs, handset type and
manufacturer; this data could provide deep insights to Whatsapp hence helping
them to increase their customer userbase.
Also this deal will provide a huge userbase of 35M and 29.4M for Pak and
Bangladesh resp. to Whatsapp, which could help them to increase their
penetration in these geographies.
Conclusion

Although voice and SMSs are witnessing a declining trend, it is unlikely that they
will die soon but in the long run both parties (OTT & Operators) should
understand that they complement each other. Operators are the enablers that
enable OTT business and as their core business area decline theyll look for new
revenue models and this creates an opportunity for OTT players to thrive and
flourish in the market.
Vimplecom and Whatsapp deal is setting an example of this business model
where not only operator is being benefited but also the Whatsapp is capitalizing
this opportunity. In the near future we could see more deals happening on the
same line, which would create a whole new ecosystem for the service providers
and further blurring the line between OTT players and operators.

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MH/PUN/123630/427