The bizarre suspension of WhatsApp in Brazil

In a bizarre series of events, Facebook-owned messaging app WhatsApp has been reinstated after a court ordered the service be suspended for 48 hours from today for failing to comply with a court order to provide the police with information around a criminal case investigation.

The shutdown of the service affected roughly 100 million people, including businesses, who use the service daily - and heavily. According to Judge Xavier de Souza, "it is not reasonable that millions of users be affected by the inertia of the company."
The suspension of the service was a penalty against Whatsapp for not responding to a court order dating back to July this year. The Brazilian court used a temporary ban as a penalty against the company, but there was no transparency around the original complaint or who made it - which led to many conspiracy theories suggesting that this is the work of the telecoms industry.

WhatsApp is the most popular messaging app in Brazil - it's so popular that Portuguese-speaking Brazilians use the English words "what's" or "zap" as a synonym for texting each other.

As I have reported earlier this year, the telecoms industry in Brazil has been mobilizing against WhatsApp for some time. The telcos believe the tool is an illegal service that piggybacks on their own highly regulated service.

Last year, Brazilian president Dilma Rousseff approved the Marco Civil da Internet, a digital Bill of Rights for the country, which included measures to guarantee net neutrality. In short, networks cannot discriminate against different types of data passing across their network; they just need to provide the infrastructure. Of course, many telcos would like to create a two-speed Internet where they can charge users of data-intensive services, such as Netflix, extra but this has been ruled out for the foreseeable future.

Even though the service has been reinstated, there are two important questions that the Brazilian government really needs to answer today. First, why there is such a lack of transparency around the court proceedings that created this penalty against WhatsApp? If the company has failed to comply with a criminal court request, and this 48-hour ban is the result, then why are those involved and the process shrouded in secrecy? Almost a hundred million people are inconvenienced and yet we are not allowed to know why?

Second, the Brazilian telecoms regulator Anatel and the telcos this body represents need to formulate a plan for the future of their industry. Due to the secrecy surrounding the court order, it can only be alleged that they may be connected to this 48-hour ban, but it is a matter of record that the industry considers WhatsApp to be an illegal service.

Brazil is a sophisticated market for smartphones and social networks. Use of all the major social networks is usually only higher in the United States, but Brazilians spend about twice the amount of time on social networks compared to Americans.

The telcos are particularly unhappy about the fact that WhatsApp offers a voice call function. Calls can be routed using VoIP using the calling users data plan or wi-fi connection and therefore not being charged as a regular call on the network. However, similar functionality has existed for years in other services such as Skype or Viber.

German-headquartered messaging app Telegram has seen a spike of over 1.5 million downloads from Brazil today. Telegram features similar functionality to Whatsapp and this should clearly signal to the telcos that it is futile to target individual apps that utilize VoIP or IP messaging. As one is targeted and shut down another will appear.

Brazilian telcos offer a very expensive service with many antiquated quirks. They still charge users a roaming fee for using a phone away from their hometown and calls between different services are charged at different rates.

The existing telcos need to appreciate that what their users really want is data. They can route calls and texts via their data plan - the enormous popularity of Whatsapp demonstrates this. Perhaps a challenge to the market from leftfield is what is required?

If a new competitor offered a data-only phone service in Brazil undercutting the existing telcos - who are still selling packages based on call minutes and blocks of texts - then I imagine the nearly 100 million daily WhatsApp users would be interested. Could this be the end of the telephone number?