BANGKOK, March 19, 2014 /PRNewswire/ -- Japan's LINE has launched "LINE Call", a flat-rate low cost voice calling service that allows users to make phone call from LINE mobile app to home or mobile phone numbers directly. Currently the service is available only on Android platform.
On the first phase, LINE targets Android users in 8 markets which are Columbia, Japan, Mexico, Peru, Spain, USA, and Thailand. The launch of LINE Call can be considered an important step as LINE strives to become a complete communication platform. This feature also positions LINE in direct competition with other internet calling service providers namely Skype, Viber, and Google Hangout. The competition will also intensify as newly acquired WhatsApp also announced in February that it'll offer voice call service in the near future.
Teera Kanokkanjanarat, senior ICT analyst from Frost & Sullivan Thailand said, "If we take a close look at LINE's growth strategy, we wouldn't be surprised to see the launch of LINE Call as Internet Calling market has high market potential. The revenue of Skype, the leader in this market, was more than 700 million USD in 2012. Also, it was not surprising to see that Thailand has been among the first few countries to launch this service as the country has the second largest LINE users, second only to Japan."
LINE Call gives Thai consumers benefit of convenience and choices with its cheaper flat-rate service. Meanwhile, LINE Call was an early sign for the shifting trend happening in Thailand's telecommunication industry.
"The rising popularity and demand for mobile data service usage represent both threat and opportunity for telecom operators in Thailand. These operators will have to adapt their service and revenue model to match the changing demand from consumers. On one hand, LINE Call represents a new revenue stream from connection fee. On the other hand, it is also considered a threat to telcos' revenue from voice service, which has been their bread and butter for many years."
"Frost & Sullivan research shows that in 2013, revenue from voice call for Thailand's major telcos declined on average of 3.7%, while average revenue from data service grew by as much as approximately 26% y-o-y. In terms of subscribers, the number of pre-paid subscribers grew by 11.9% and on average of 27.8% for post-paid subscribers." Teera added.
The shifting trend in revenue structure for telcos has been spotted in various countries in the region. NTT DoCoMo experienced 40% decline in average revenue per user for two consecutive years after LINE was introduced in Japan in 2011. SingTel and StarHub, the two prominent telecom operators in Singapore also found themselves pressured from the rising popularity of WeChat and WhatsApp.
"What we see across the industry is the shifting trend for telecom operators to put focus on monetizing from OTT and value added services, including investment in other startup businesses both from within telecom boundary and from other industries."
"In Japan, NTT DoCoMo has begun invested in other businesses such as cooking school, as a way to generate content and distribute as value added service for its mobile users. Telstra from Australia offers HD voice that suppresses background noise so that the recipient gets very clear voice quality at the receiving end. NTT DoCoMo offers voice translation over LTE, which means that a person in Japan can speak in Japanese, while the receiving party in another country can hear it in another language, say English in real time. This gives people a reason to make overseas calls using NTT DoCoMo's service instead of an OTT service. In Singapore, SingTel and StarHub also made change in its data service plan to exclude WeChat and WhatsApp from regular data usage. Mobile phone users can then pay extra minimal fee to have unlimited WeChat and WhatsApp usages."
"The important factor for Thailand telecom market is the readiness and licensing of 4G LTE network. As we have seen it happened in many other countries, 4G network will create many more opportunities and give rise to many kinds of OTT and value added services. For the adoption and feedback on Line Call, we will have to wait and see the response from users as quality and stability of the service will determine its success in Thai market." Teera concluded.
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SOURCE Frost & Sullivan