Internet telephony and messaging provider Viber has expressed interest in exploring partnership opportunities with African telcos as it looks to expand its presence and capabilities across the continent.
The over-the-top (OTT) player has been a thorn in the side of African mobile operators by offering a much cheaper alternative to traditional phone calls. According to research from Xalam Analytics, the Africa and Middle East research unit of Heavy Reading , buying a data pack and using Viber or WhatsApp can save an African mobile customer anywhere between 40% and 99% on the cost of using a traditional telecom service. (See Africa's Data Dilemma.)
Viber says it has been growing in Africa largely through word of mouth, but hints that partnerships with telcos could help it to expand more quickly.
"We have only just started to build a marketing presence in the region, but we are definitely open to exploring partnership opportunities with telcos in African markets," said Mark Hardy, the chief marketing officer of Viber, in an emailed response to questions from Light Reading.
While Viber claims to have established partnerships with operators in other parts of the world, and is known to have previously teamed up with Indonesia's Axis, it does not have the best reputation in this area, according to Guy Zibi, a chief analyst at Xalam.
"Viber is famous for being difficult to work with on partnerships," he says. "The impetus is not as high [for OTT players] as it is for the telcos and that is part of what is making discussions a bit difficult."
Viber CEO Talmon Marco has previously talked about revenue-sharing opportunities with operators, but he has also ruled out actually paying service providers to use their networks. France's Orange (NYSE: FTE) is one operator that believes it should be able to charge OTT players for using its African networks.
Nevertheless, circumstances could force Viber and service providers into one another's arms. Operators need to find a way of attracting more customers to data offerings without cannibalizing their voice and text-messaging revenues, while Viber is eager to provide a more "localized" experience to customers and become what Hardy calls a "mobile entertainment ecosystem."
"The messaging app space has exploded over the past 18 months and the concept of free communication has become everyday," he says. "All brands are experimenting and looking for ways to innovate, as users’ expectations become more sophisticated."
Viber itself is under pressure to differentiate itself from OTT rivals such as Skype Ltd. and WhatsApp.
Last year, the company launched a mobile social media platform called Public Chats, allowing users to follow the conversations of celebrities and track news about particular sports teams and brands. It followed that move up earlier this year with the introduction of its own gaming platform.
Hardy says the web player currently has more than 55 million users across Africa -- or about 8% of its entire customer base, according to recent data from web statistics firm Statista -- and that its biggest markets on the continent are South Africa, Angola, Ghana, Nigeria, Senegal, Ethiopia, Sudan, Egypt, Algeria and Morocco.
While the growing availability of low-cost smartphones has helped Viber to expand its customer base in Africa, the lack of high-quality network infrastructure continues to be a source of frustration, according to Hardy.
"One of the challenges we still face in some markets remains the quality of telecom infrastructure," he says. "All applications relying on good 3G and WiFi connections will witness an even stronger growth once these improve."
Nevertheless, as more customers acquire smartphones and data networks are rolled out, Viber may find itself under greater pressure to support service offerings besides telephony and messaging.
Software giant Microsoft Corp. (Nasdaq: MSFT) had much earlier spent $8.5 billion to acquire Skype, which has now become an integral part of its unified communications offerings.
— Iain Morris, , News Editor, Light Reading