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Another massive threat emerges for wireless carriers: Facebook

Updated Apr 9th, 2014 2:10PM EDT
WhatsApp Wireless Service Plans

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Facebook’s acquisition of WhatsApp has some interesting implications. Among them is the fact that Facebook is now starting to challenge mobile operators in major Western markets. German operator e-plus now offers a WhatsApp SIM card that gives users unlimited WhatsApp messaging combined with a mobile data and mobile voice calling package of 600MB and 600 minutes. The big news here is the price: 10 euros, or about $14 — and that is not a monthly charge; you can stretch it out as long as you can.

If you lean heavily on free WhatsApp messages and have home Wi-Fi for downloading apps and doing light browsing, that $14 package could be used entirely for mobile voice. 600 minutes could last six weeks, two months or much longer if you employ Skype over Wi-Fi when you are home or within Wi-Fi hotspot coverage.

This is a serious package for people looking to save serious money.

With WhatsApp, Facebook is now a credible rival to budget mobile service providers in the largest market in Europe. WhatsApp has offered more modest deals in select emerging markets, but this European offensive might be an indicator that the company is preparing a wider service provider campaign in affluent Western countries.

Could this be an important part of why Facebook bought WhatsApp? There has been plenty of speculation about how Facebook might launch a smartphone, but what if it actually intends to challenge mobile operators directly as an MVNO by using WhatsApp as its proxy?

WhatsApp plans to roll out voice over IP services, which would essentially turn the app into a sleeker version of Skype. In near future, Facebook might be in the business of offering cut-rate, bundled voice/text/data packages to consumers looking for cheap alternatives to traditional mobile contracts.

What happens when Amazon launches Kindle smartphones to complement its strong tablet range — will we see Facebook and Amazon slugging it out as MVNOs in America’s heartland?


For more on the new threats emerging for wireless carriers, be sure to check out U.S. wireless carriers finally have something to fear: Google.

After launching mobile game company SpringToys tragically early in 2000, Tero Kuittinen spent eight years doing equity research at firms including Alliance Capital and Opstock. He is currently an analyst and VP of North American sales at mobile diagnostics and expense management Alekstra, and has contributed to, Forbes and Business 2.0 Magazine in addition to BGR.


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