Whatsapp challenger Nimbuzz hits town

Vikas Saxena, chief executive officer (CEO) of Nimbuzz.

A new challenger to WhatsApp is in town for yet another piece of the voice and instant messaging action, but telcos might have less to fear this time around. Nimbuzz, which is headquartered in India, is expanding into Singapore and the rest of South-east Asia with a revenue model that aims to cut the telcos in.

The firm, which is backed by the same investors behind Skype, is in talks with "one of the big telcos" here about a revenue- sharing model, chief executive Vikas Saxena told The Business Times yesterday.

While calls and messages are free between users with the app, users who make calls to landlines and mobile phones that do not have the app need to buy credit from Nimbuzz - a source of revenue for the firm.

In South Asia, where a good proportion of Nimbuzz's 100 million users are, the telcos that it partners take 60 per cent of the revenue from each transaction, while telcos in other markets take 30 per cent.

"While Nimbuzz puts a dampener on SMSes, what telcos lose, they gain here. This is a much richer platform than SMS ever was," Mr Saxena said.

Last year, telcos lost US$23 billion (S$28 billion) in SMS revenue to social messaging services, according to estimates by Ovum.

By 2016, the operators are expected to have lost US$56 billion (S$69 billion).

While telcos' responses have ranged from the receptive to the conservative, Mr Saxena pegged Singapore telcos as being "more open and experimental" where this sort of arrangement is concerned, compared with the telcos in India. In that country, one in every five mobile Internet users is active on Nimbuzz, he said.

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