Considerably large amount of people feel like they spend more time on Viber on their mobile phones than they do for making regular calls and sending SMS. People who have international business or family connections, or even ones who would like to avoid regular domestic mobile operator charges enjoy using Viber for making absolutely free (details below) voice calls and text messages. Consequently, people can’t help thinking how can Viber be free and how/if it makes profit.
What is Viber at the first place?
In broad technical terms, it is a VoIP (Voice over IP) application. In English, this means that the voice and text data are sent and received through Viber by using the data connection of the mobile phone over the internet.
Is it completely free?
Both yes and no! Since your mobile phone must be connected to internet for being able to use Viber, hypothetically, you may be paying some fee to your mobile operator for internet connection, exactly in the same way that you pay your internet service provided for connecting your home PC to internet. In this respect, it could be argued that it is not completely free to use Viber. Nevertheless, today almost all subscribers choose internet plans with fixed flat rates with their mobile operators depending on their other internet usage and therefore using Viber comes completely free doesn’t matter how much one talks or chats.
As a matter of fact, Viber so far successfully sustains the principles they’ve announced years ago after their launch. Viber,
– does not charge for the app,
– does not charge for Viber to Viber calls,
– does not charge for Viber to Viber texts,
– does not advertise on the Viber app.
Does Viber make money?
Except its main feature of connecting people freely over Viber, there are some paid services on Viber as well:
– So called “Viber out” calls is a paid service Viber offers. This basically means making calls through Viber to the regular mobile number of the person you want to reach, exactly as calling a mobile phone through Skype. In other words, additional charges occur if you use Viber to call someone’s phone so that s/he receives the call not through Viber (if Viber is not installed on the receiving person’s phone or if s/he does not have internet coverage.)
– There are some add-ons, such as games that can be downloaded at a cost and stickers or graphical animations which one may choose to purchase at additional cost (which are one-time purchases), and use these in the text messages.
Does Viber make profit?
Well, probably this is the most interesting question after all. Obviously, making money and making profit are two different things, and connecting millions of subscriber comes at a cost to Viber. If to cite a few lines from Investopedia, the picture on profitability seems to be as follows:
Although having been around for nearly five years and boasting 249 million monthly average users, according to Statista, Viber still has yet to make a dime. In 2013, the company was acquired by Japanese Internet giant, Rakuten, for $900 million as part of their global Internet services takeover strategy. (Rakuten holds notable stakes in other social media services such as Pinterest and the failed Kindle-esque app, Kobo.) On the day the sale was announced, Rakuten’s shares plummeted by 9.5 percent, the most in four years, as shareholders and bears assumed this was just another folly in a series of blunders committed by a management whose lavish spending was depleting the company’s financial resources.
This bearish sentiment was not without support, as official documents from Rakuten showed that Viber made a total of $1.5 million dollars in revenue and incurred net losses of $29.5 million in 2013 and $14.7 million in 2012. While Viber’s strict adherence to keeping the app free of advertisements and free to download is laudable, it is quite obvious that its current monetization model is woefully inadequate and requires a revamp if Rakuten is to justify its $900 million/ $3.61 per-user investment.
Although Viber’s official revenue numbers have not been released, it can be inferred that Viber makes money through its phone services, stickers, and games. As of 2013, Viber has yet to turn a profit (although this could have changed), but if the company can successfully implement revenue generating services, as well as, the profitable strategies of its competitors, the future could be bright for this popular VoIP application.