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That is only possible because Ejabberd doesn't use the AGPL license.

Come on, it would definitely still be possible with AGPL code. What brought people to whatsapp is its ubiquity and the fact that it just works, and what keeps them from going elsewhere is the inevitable network effect.

Nothing in the AGPL prevents either from occurring.

I think you are misunderstanding jeena. If ejabberd were AGPL, then a fork/a instance of it like Whatsapp would be legally obliged to open up their code as well.

No idea whether the assumption is true that Whatsapp is just a branded deployment.

I still don't understand how opening up the codebase would prevent them from being successful.

As the countless messaging apps out there demonstrate, the value of communication apps lies in the network they build. If they provide a decent UX, and successfully bootstrap a network large enough, it wont matter if their code is open.

I don't think that was an argument against that. At least I agree. The situation is only possible because the AGPL is not used for the free component, but Whatsapp should have no problem opening up their code.

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