In our Global Internet Phenomena Report: Fall 2011 published just last week, we noted the growing popularity of data messaging apps on mobile networks.  In Asia-Pacific specifically we observed that during peak period, between 6%-8% of all mobile subscribers were using the messaging application WhatsApp.  For those who are unfamiliar, WhatsApp is a smartphone app that allows subscribers to use their data plan to send text and picture messages without having to pay any SMS or MMS fees.

BlackBerry users have long praised BlackBerry Messenger (BBM) for its ability to send messages using a data plan to other BlackBerry users, but in recent years as the smartphone marketplace has become more fragmented, messaging apps that allow users to send messages between platforms have really started to gain popularity.  LiveProfile, Kik, PingChat are just a few of the apps available that offer this functionality, but WhatsApp popularity is undeniable – the service is now reporting that their users are sending over 1 billion messages each day.

While subscribers love these apps, network operators are, understandably, less enthusiastic. Apps that enable instant messaging or voice communication via data plans compete directly with the SMS and voice services upon which operators depend for a substantial portion of revenue.

Dutch operator, KPN, started to feel the impact of these revenue replacement apps when they issued a profit warning earlier this year, directly citing revenue-replacement apps BBM and WhatsApp as causes for a 10% decrease in text messaging revenue.

BBM’s popularity in many countries is due in part to mobile operators offering data plans that zero-rate many popular social networking services, including BBM.  These plans make instant messaging services available to users at a low, fixed price and allow mobile providers to gain additional revenue from customers who might not otherwise purchase a data plan at all. 

To combat the lost revenue from these messaging apps, operators will need to continue to explore innovate ways to package their services. By including this new breed of messaging services in low cost data bundles as they do with BBM they may be able to maintain a sustainable business and do so in a manner that embraces subscriber preferences.