Carriers Lost Round One Against WhatsApp. Can They Rebound?

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It’s possible the service wouldn’t have taken off anyway, even without the bureaucracy of a big company.

It was always behind the competition, getting started when WhatsApp already was starting to attract millions of users globally. T-Mobile’s home market in the U.S. was already offering unlimited text- and image-messaging plans, so American users weren’t flocking to Internet-based apps like WhatsApp anyway. And the decision to offer separate voice and messaging apps left Bobsled with a big integration headache once it became clear the two should be tied together.

But Samano says it’s also clear that a big company like T-Mobile just wasn’t able to move fast enough to keep up with a small startup. Even with a small team and support from higher-ups, Bobsled had to run its plans through a gauntlet of meetings with lawyers and other overseers who could delay a product release for long periods, Samano said.

While they were sitting in those meetings, a startup with a handful of people could simply pull the trigger on its product, and get to work on the next version.

“In the time a carrier does two releases, they’ve done 25. They’re learning at a speed that you cannot match,” Samano says. “A company the size of T-Mobile is just not willing to take those risks.”

Others in the industry say the carriers still have so many advantages—money, infrastructure, subscribers—that it’s too soon to count them out in the race to build viable Internet-based apps.

Mountain View, CA-based Jibe Mobile, for example, is heavily involved in overseas carriers’ efforts to build next-generation messaging apps, has investment from Vodafone Ventures, and is providing the technology behind Deutsche Telekom and Sprint’s new messaging services.

HD Messaging, which bought Bobsled from T-Mobile, now provides Internet-based messaging apps for about 10 carriers in Asia, including companies that represent some 700 million users in India alone. Linner, the company’s CEO, said carrier attitudes about startups offering competing services have rapidly changed.

“Some of them were early to embrace it and have done stuff, like T-Mobile did. And there are others who just wouldn’t believe there was a threat from the over-the-top space,” he said. “I don’t believe there’s anybody, at least at the executive level these days, who doesn’t believe that’s a threat.”

But even as it’s gotten easier to sell customers on the idea, getting the work done with behemoth companies is still a problem—even if you’ve got buy-in from the highest levels.

“We have one of the biggest operators in the world that has signed the contract, had everything ready to go with us,” Linner said. “And it got to their CTO, who wanted to do a year-long assessment of which technology they wanted to use.”

After all that runaround, he said, there was one more surprise: the company wound up getting a new CTO.

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