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Facebook's WhatsApp Introduces Video Calling

By Evan Niu, CFA – Nov 15, 2016 at 4:20PM

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It's about time.

Image source: WhatsApp.

Facebook (META 1.97%) subsidiary WhatsApp has announced that it is introducing video calling to its popular service, which has over 1 billion users worldwide. The company says the feature will become broadly available -- and free -- within a matter of hours. The news comes over a year and a half after WhatsApp added voice calling and Facebook Messenger debuted video calling, which occurred in March 2015 and April 2015, respectively.

Better late than never?

You might think it's bizarre for a major messaging service to only now be adding video calling here in 2016. There's no shortage of competing offerings from rival companies large and small. If anything, there are too many choices to choose from, which actually takes away from the value of each since all services leverage network effects. But that's only really the case in the U.S. and other developed markets. Consumers in emerging markets still have fewer options, and these markets are precisely where WhatsApp has always been most popular. This is more of adding a critical feature to a service that has already gained critical mass.

WhatsApp's video calling will resemble Facebook Messenger's in terms of its interface and experience, as well as its backend infrastructure. One of the main sources of non-financial support from Facebook is that the social network allows WhatsApp to use its global server footprint, while WhatsApp still mostly operates autonomously.

WhatsApp video calling will also be fully end-to-end (E2E) encrypted, which should satisfy privacy advocates and consumers that are worried about surveillance. Voice calls and text messages on the service adopted E2E encryption in April of this year.

Still No. 1 in emerging markets

WhatsApp is very specifically targeting emerging markets with video calling, which is in line with its core user base. The service has always been strongest in emerging markets, which is largely why Facebook acquired the company in 2014. Facebook's own Messenger service is popular in developed countries, and WhatsApp's leadership position in emerging markets was a perfect strategic complement.

In its blog post announcing the new feature, WhatsApp said it wants these types of features to be universally accessible, and not limited to "those who can afford the most expensive new phones or live in countries with the best cellular networks." At the announcement event in India, WhatsApp founder Jan Koum added, "We're obsessed with making sure that voice and video work well even on low-end phones."

In fact, India is now WhatsApp's largest market, with over 160 million monthly active users in the country. That's a big chunk of the 1 billion MAUs that WhatsApp now has, and indicative of where WhatsApp will continue focusing its efforts. Most companies aren't focusing on bringing services like these to regions like this in the same way that Facebook is. The social network attempted to launch an internet satellite to bring connectivity to rural Africa a few months back, but we all know how that went.

For now, WhatsApp will continue cementing itself as the leading communications platform in emerging markets.

Evan Niu, CFA owns shares of Facebook. The Motley Fool owns shares of and recommends Facebook. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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