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Could the Field of Dreams mVoIP Business Model Turn Sour?


by on January 22nd, 2013

The subscriber versus revenue debate in the area of mVoIP is one which has been in progress for a good while now, but to reiterate: there are a lot of companies (Viber, Fring, Kakao Talk, Line, WeChat, Whatsapp, to name but a few) with a very healthy number of mVoIP and OTT messaging subscribers (several have over 100 million), but few paying ones.

If you take a step back, it is a remarkable achievement that they have signed up such massive subscriber bases in such a short space of time (two years or so in most instances). But signing up the subscriber in the first instance is much less than half the battle. At first glance, the main problem is to make them pay (or find another way for them to generate revenue): however, what may eventually be just as hard, as traditional operators’ charges come down, is to keep them even if they are not paying for the service.

Looking at subscribers’ motives could provide a clue as to the future of mVoIP and mMessaging. Subscribers sign up to an operator because others do. To talk (or message) you for no charge, the called party, that is your friend, also has to be on the network.

For mVoIP players, the first part of the mVoIP business model, signing up new subscribers, is viral marketing on steroids – sign up to the service, the message goes, and you get something for nothing – so long as your acquaintances are on it too. What do you do? Obvious. You get your mates to sign up and you have a virtual community of non-paying mVoIP users.

And there is the rub. The fact that many mVoIP customers have never paid a Sou for the service means that they are fickle. They can easily adopt another service provider: indeed, it is likely that the average mVoIP user may have several accounts for different uses (one for family, one for one group of friends, one for work, one for another group of friends etc). It comes down to an old adage- you value what you pay for. If you haven’t paid for the service, you don’t value it and either unsubscribe or, more likely, churn by neglecting the account. When does an inactive mVoIP subscriber become a churned one, I wonder… Just playing devil’s advocate…

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