Mobile communications is still at an early stage currently, but it will be the next big innovation hotspot for the Internet within the next two years. When that happens, over-the-top (OTT) service providers and telcos will need a comprehensive strategy to bolster customer "stickiness" to stand out from the competition, says the CEO of Nimbuzz.
In a recent interview with ZDNet, Vikas Saxena said that the mobile communications industry is still nascent, but heated competition is expected in the next two years. This is because every user will likely have downloaded the top 5 most popular mobile apps onto their handsets, and service providers will have to find a way to get users to use their respective apps on a regular basis, he explained.
The ultimate winner, Saxena believes, will be the one with the most comprehensive suite of functionalities that aligns with user behavior.
Creating customer "stickiness"
For Nimbuzz, the mobile messaging service provider has developed several ways to create "stickiness" among its users. Saxena pointed out that like other Asian service providers, it has opened up its application programming interface (API) to third-party developers for them to create other services and content for the platform.
Telcos, for example, have utilized this functionality to integrate their payment services with Nimbuzz. This means that Nimbuzz users can purchase credits directly from their operators to buy content such as virtual gifts on the messaging platform, he explained.
It also integrates not just the user's phonebook, but contacts from other third-party instant messaging services, such as Facebook Chat and Google Chat, he added.
Saxena pointed out a distinguishing element it has from many mobile messaging service providers, which is that it has a desktop application for its service. About 9 percent of its subscribers use its service via their PCs and mobile, and other third-party providers are missing out on the demographic who enjoys communicating using their PCs, he said.
Nimbuzz fact fileNimbuzz started in 2006, with its headquarters in the Netherlands and a product development office in India. The company moved its international headquarters to India in May 2012 due to strong market growth.
The company now has research and development units in India, Argentina, and the Netherlands.
Nimbuzz reached 100 million users in 2012, with 60 percent of its users in Asia-Pacific. The company expects growth to come from Russia, as well as China and South Korea.
Its Asian competitors include Tencent's WeChat, which boasted 300 million users in mid-January; Line by South Korean search portal operator Naver, with 100 million users in mid-January; and Kakao Talk, with 70 million users at the end of December.
He added that while Microsoft has chosen to end its Windows Messenger service and integrate it with Skype, there is still room for desktop instant messaging. It is a space mobile communications should move into as the PC is "too big a platform" to ignore, he stressed.
The CEO also advocated an ID-based log-in system to authenticate and populate users' contact lists, regardless of the device they are accessing the service with, is important in today's environment where each person owns more than one computing device.
This also means that Nimbuzz does not need to crawl through users' phonebooks on their handsets to build up the contact list. US-based mobile messaging service provider WhatsApp was found to be violating Canadian and Dutch privacy laws because of its practice of getting users' permission to access their address books.
Telcos too late to social messaging game
Saxena stated that telcos are no threat to third-party mobile communications providers such as Nimbuzz because they are too late into the game and will not be able to catch up with OTT players.
He said operators will begin to accept third-party communications services as "a fact of life" and join these providers. Telcos in India and the Middle East, for instance, have partnered with Nimbuzz, while certain telcos in Indonesia are actively promoting its service as part of a data service bundle, he noted.
According to analyst firm Ovum, telcos have lost US$13.9 billion in SMS revenue due to social messaging in 2011.
Operators remain keen to wrest back control in the mobile communications space though. South Korean operators SK Telecom, KT, and LG Uplus, for example, announced last December that they are looking to create an interoperable platform for their respective rich communications suite under the GSMA's joyn branding.