In a move to actively address increased competition from Google's Rich Communication Services (RCS) and Apple's impending entry into the commercial messaging space, Meta's WhatsApp slashed business messaging costs by 16–97% in numerous regions, notably by 63% in India.

WhatsApp's new utility messaging pricing in India, at Rs 0.11 per chat, is even less expensive than traditional SMS services, which charge Rs 0.12–Rs 0.15, and RCS, which charges Rs 0.20–Rs 0.25.

In a recent blog post, the firm stated, "Effective August 1, 2024, we are lowering rates to be competitive with alternative channels and encourage businesses to bring more end-to-end post-purchase customer journeys to WhatsApp."

"Effective August 1, 2024, we are lowering rates to be competitive with alternative channels and encourage businesses to bring more end-to-end post-purchase customer journeys to WhatsApp," the firm announced in a recent blog entry.

The decreased costs, however, only apply to one-time authentication (OTPs), order/delivery management, account updates, payment reminders, and feedback surveys. WhatsApp has increased the charge for marketing and sales messages by 8%, to Rs 0.78 per chat, to avoid the network from becoming a spam conduit. The higher rate will take effect from October 1.

Experts believe WhatsApp's dramatic price decrease would have an influence on both messaging channels, particularly RCS, which is still in its early stages in India. Some believe it will have a significant impact on existing SMS systems, as WhatsApp currently controls a large portion of the business messaging industry. Others predict that banks and government organizations will continue to employ SMS to provide universal coverage.

"The pricing shift directly targets SMS.RCS might have a more direct competitive impact if businesses select WhatsApp for its wider reach and lower cost," said Shradha Thapa, Infobip's regional head of OTT India.

"Regions with a high penetration of WhatsApp users and growing internet access, such as Latin America, parts of Asia, and Africa are likely to see increased volumes," she informed us. WhatsApp's single-largest market in the world is India, with almost 500 million users.

Aniketh Jain, creator of consumer communications firm Fyno, stated, "Unlike SMS, which charges for each 160-character message, WhatsApp's charges cover a 24-hour conversation." This approach might bring SMS even closer to oblivion.

However, Beerud Sheth, CEO of Gupshup, a worldwide leader in conversational platform services, believes RCS is a totally different ecology than WhatsApp. "While WhatsApp's pricing and policies are determined by one company, Meta, RCS pricing and policies are individually decided by hundreds of telecom operators on their respective networks."

SMS continues to account for 90% of India's corporate market, with volumes rising from 55 billion in January to 60 billion in June, according to estimates. In terms of revenue, WhatsApp is estimated to hold a 30% share of the Rs2,500-crore corporate messaging industry. RCS, which has complete coverage in ten countries, has sent over one billion messages as of December 2023.

"With multiple price revisions over the last two years, I wouldn't be surprised if there is another revision and new business model in the coming months," said Nitin Singhal, managing director of Sinch India. "Even though it is early days, I see a decline in SMS volume, given the large number of active WhatsApp users." At the same time, SMS's reach cannot be equaled by any other medium, so I don't expect it to be a significant blow."

Recently, government departments have begun to employ WhatsApp for new purposes. "We are using the platform for Supreme Court, PMJAY scheme, election queue management, survey, and complaint monitoring, but mission-critical services such as UIDAI and EPFO continue to be on SMS and will remain so," a top official at the National Informatics Centre (NIC) explained.

Every month, NIC processes communications traffic from 800 state and central government ministries, totaling roughly 2.5 billion messages.

"WhatsApp is a fantastic tool for consumers and businesses to get things done, from booking flights to receiving fast delivery updates. In response to ET's questions, a WhatsApp spokeswoman said: "We occasionally make changes to our offerings to better reflect how the service is used and the types of information people choose to receive."

Gartner believes that RCS and Google will have a combined market value of $1.6 billion in India by 2028, accounting for half of the commercial messaging industry. While basic communications channels like SMS are expected to increase at a 12% annual pace until 2028, sophisticated channels like RCS and WhatsApp will grow at 58%, according to Gartner. Other mediums include Telegram, Truecaller, email, interactive chatbots, voice, and IVR.