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What’s up in Telecom Industry? Who Disturbed the Messaging and Voice Industry in the Recent Past?

What’s up in Telecom Industry? Who Disturbed the Messaging and Voice Industry in the Recent Past?

Jan Koum is an Internet Entrepreneur who co-founded WhatsApp, a cross-platform mobile communication app, along with his friend Brian Acton in 2009. His innovative idea to allow people everywhere in the world to communicate with other people at ease, but almost without any additional charges. This has disrupted multiple revenue streams in the traditional telecommunication industry, and opened up a new and innovative method to connect people globally.

The user-friendly interface of the application with several innovative features offered to the people at a very nominal cost without any interruptive advertisement has helped it become the most popular messaging platform in the world.

Telecom Industry

Due to its rising popularity, the company was acquired by Facebook Inc. in 2014 for a whopping compensation of US$19 billion. As of now, the company’s user base covers more than 1 billion people in over 100 countries around the world. It has reportedly carried out around 42 billion messages, and 100 million voice calls every day across the world. In addition, almost 1.6 billion photos, and more than 250 million videos are shared among people every day through the platform.

What did it Disrupt?

Jan’s idea behind WhatsApp to provide low-cost, convenient, and more efficient communication services has led the disruption of the telecommunication industry. It opened up an alternative to expensive messaging and calling services which were otherwise serviced by the so called big telecom companiesaround the world which employs millions of people around their outdated system.
WhatsApp not only allows its users across the globe to communicate with each other through the means of messaging and calling but also through allowing sharing of photos, videos, documents, location, audio messages, and contacts as well. In addition to offering superior and more convenient features, the company’s no advertisement strategy appeals massively to it’s over a billion users and other prospective users. According to market estimate, it is primarily affecting estimated US$100 billion global text messaging market through its innovative way to connect.

Telecom Industry

Further, the voice calling services through its platform in addition to its text and voice messaging services negatively impacted revenue of the several telecom companies around the world during. The expected damage to the telecom industry will be much bigger in the coming days with the addition of more such providers with better features. According to market estimates, the total damage to telecom companies around the world in terms of revenue from voice calling services due to WhatsApp and other similar service providers has been estimated to be close to US$386 billion during the period from 2012 to 2018.

Telecom Industry

In January 2016, WhatsApp’s CEO Jan Koum announced that the company will no longer charge any subscription fee from its users in contrast to its previous strategy to charge US$1 annual subscription fee after the first year of free services.

This strategy to provide services completely free of charge to its users was employed to attract more users and the people who don’t have access to a credit and debit card to pay the charges after first year of free services especially in the emerging economies. Moreover, the company’s strategy to provide efficient services to its users without any advertisements, games, and gimmicks, unlike its competitors is expected to attract more people to the platform at a much faster pace will further disrupt the telecommunication market at even higher level. Ultimately, there would be a reported decline in revenues for many telecom companies around the world in the near future.

How did the idea emerge?

Jan’s idea, as he states it, was simply based on providing a communication service to the people through a platform with “No Ads! No Games! No Gimmicks!”. The idea came to Jan and Brian when they purchased a new iPhone, and was shuffling through the smartphone’s Appstore. After realizing the huge potential of the app market, they decided to develop an app with their acquired knowledge which would allow people to keep their status next to their name.
After several unsuccessful attempt, Jan was on the verge of quitting but Brian convinced to keep at it. Finally, after months of beta testing, the application was successfully developed, and was made available to the people with the name of “WhatsApp” in 2009.

Jan Koum and WhatsApp

Born in February 1976 in Ukraine, Jan Koum had a very humble beginning and lived-off on food stamps when he moved to the US with his mother in 1992. However, his family situation worsened when his mother passed away due to cancer.

Soon after, Jan developed interest in programming while still in high school, and had a good knack at it. By the time he finished his schooling, he was a skilled self-taught computer networking engineer, and enrolled himself in San Jose State University for higher studies. In the meanwhile, to pay for his studies he got himself a job at Ernst and Young as a security tester.

While on job he got acquainted with Brian Acton who was working for Yahoo at that time. After a few months, Brian Helped Jan to get a job at Yahoo as an Infrastructure engineer which forced Jan to quit his studies due to work pressure in the new company. Both Jan and Brian worked together at Yahoo for nine years before quitting the job in 2007 to explore newer avenues.

Both took a year off after quitting the job and traveled across South America together. On their return to the US, both separately applied for jobs at Facebook and Twitter. However, their applications were rejected by both the companies. In 2009, after buying an Apple iPhone, they were intrigued by the apps available in the smartphone’s Appstore which led them to develop an application together to provide convenient communication services and was later named as “WhatsApp”.
Following WhatsApp acquisition by Facebook for US$19 billion in a stock and cash consideration in 2014, Jan made billions of dollars from the deal. As of July 2016, his total net worth stood close to US$9 billion. Currently, he is the CEO of WhatsApp as well as serves as a member on the Facebook’s Board.

(Analysis of successful business models by DART Analysts)

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