WhatsApp Ascent Threatens Nordic Carriers
WhatsApp became the world’s most popular messaging service in 2011 – and in 2012, it has become the world’s number on mobile app in all categories. For many consumers, WhatsApp basically replaces SMS while offering value-added features such as group messaging and file transfer.
In Europe, the impact of WhatsApp on consumer behavior and operator performance is becoming evident at different speeds in different markets. In Netherlands, SMS pricing has historically been unusually high and consumers embraced WhatsApp immediately after its launch in late 2009. WhatsApp became a Top Three Dutch iPhone app in early 2010 and has latched onto #1 position for the most of the time since May 2010.
In the first half of 2011, the Netherlands became one of the first European markets posting notable SMS volume declines. The Dutch telecom regulator OPTA reported 2.5% text-message volume drop in 1H11 from 1H10. The decline steepened notably in 2012, leading to KPN’s substantial profit warnings. The Dutch giant carrier has blamed WhatsApp directly for its SMS revenue erosion.
In Nordic countries, SMS pricing has been lower than in the Netherlands – and WhatsApp was slower to take root. The app invaded the Top Ten chart of the Finnish iPhone apps in early 2011 after selling moderately well throughout 2010. In the July of 2011, WhatsApp became a Top Three app in Finland. Since January 2012, the app has spent most of its time as the Number One iPhone app in Finland.
What this means is that Finland was roughly one and a half year behind the Netherlands when it comes to WhatsApp becoming a mass market sensation.
Will Finland also lag the Netherlands by roughly the same time span when it comes to SMS erosion? If that is the case, Finnish mobile market might see text-messaging volume softness during 2H12. The Finnish market has shown some early signs of consumers starting to move on – the once popular SMS message blooms during Christmas and New Year were notably smaller in 2011 than during the previous holidays. However, overall SMS volumes in Finland have not yet caught the Dutch disease.
WhatsApp has now spent extended periods of time as Finland’s Number One app roughly for the past eight months. The iPhone market penetration in Finland is notably lower than in the Netherlands, which is likely to soften the WhatsApp impact to some degree over the next couple of quarters. Nevertheless, 2013 is going to be a year when we may see accelerating changes in Finnish texting habits.
