Mobile operators unite against WhatsApp in Brazil

Telecom firms in Brazil are preparing a report to convince the government that the app is illegal
Written by Angelica Mari, Contributing Writer

The largest telecom operators in Brazil are currently working on a report that aims at proving the irregularity of cross-platform messaging tool WhatsApp to the government.

Three senior sources within the top telecom firms in the country told Reuters that the document will present economic and legal arguments against the service. One of the companies heard is also considering legal action against the Facebook-owned app.

The report, which questions the validity of WhatsApp's voice service (rather than the messaging feature) for operating based on mobile phone numbers, will be presented to Brazil's telecommunications regulator Anatel within two months.

The telcos argue that they pay activation and ongoing fees for each mobile phone number issued to customers, something that WhatsApp doesn't do.

"We are questioning specifically the voice service, which basically makes calls using a mobile phone number. Services like Skype have their own login and password and this is not irregular," one of the sources said.

Several senior telecom executives in Brazil have voiced their concerns and opinion about WhatsApp's service and how it affects them. For example, Telefonica Brazil's president Amos Genish has been quoted as saying that WhatsApp is a "pirate operator" and that the company also intended to question the app's operating model.

However, services like Skype - which is deemed "legal" by the operators - and WhatsApp all deliver voice and data via the data package and by law, companies should not interfere in how customers utilize their data allowances.

What Brazilian companies and government seem to be trying to do is introduce regulations - and therefore a taxation regime - to over-the-top services which include WhatsApp as well as Netflix.

Brazil's Communications minister Ricardo Berzoini has recently said that services like WhatsApp "subtract jobs from the Brazilian market", while failing to recognize that the laws that govern the provision of telecom services in Brazil are outdated and focus only on fixed line services - a model that has been surpassed by mobile services long ago.

Similarly to other situations where disruptors such as Uber for taxis and Airbnb for hotels also got into trouble, the telecom industry in Brazil is doing what is expected: defending its existing business model and discrediting the newcomer for doing precisely what appeals to the customer base. But these arguments never really protect customers and are only ever good for one thing: boosting public and private sector revenue.

A comment on the subject made recently by Google Brazil's head, Fabio Coelho, was interesting: he defends the view that while telcos complain about the use of WhatsApp for voice, they also generate profits from the tool's popularity. In addition, the executive pointed out that telcos should actually learn to live with a reality where their market is shared with mobile phone apps. But Coelho's main point was that choices should be offered to customers. That makes perfect sense.

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