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Free WeChat challenges telecom operators' SMS serviceBEIJING, Apr 23, 2013 (Xinhua via COMTEX) -- An official of China's Ministry of Industry and Information Technology (MIIT) conveyed verbal supports to free Wenxin, a WhatsApp-like messaging service, on Tuesday, which may further challenge Chinese telecom operators' SMS service. Zhang Feng, head in charge of the telecommunication development department of the MIIT, welcomed and supported free WeChat, a service that had all the functions of short messaging service (SMS) and was basically free except some minor charges for network flow, developed and provided by Tencent Inc. on a press release for industrial and telecommunication industry's development in quarter one held by MIIT on Tuesday. In last two months, a debate over whether or not WeChat should be charged went on and on in China's IT industry, as the free chat application has gotten increasingly popular in China and nibbled SMS market away from Chinese mobile telecom operators such as China Mobile (CHL.NYSE; 00941.HK) and China Unicom (CHU.NYSE; 00762.HK; 600050.SH). The telecom operators all witnessed surge in their data traffic over the past year with mixed feelings, as the as the traffic growth was mainly stimulated by services such as WeChat, which squeezed the profit margin of the carriers' voice and SMS service. Statistics show that on the eve of the spring festival, mobile phone users in Beijing sent 1.16 billion pieces of greeting short messages. Though the amount was 60 million pieces more than a year ago, short messages sent by each user decreased from 42 to 36 pieces on average. To address the challenge, China Mobile lately launched four procurement bids for its own free chat tool Fetion with a total budget of 640 million yuan, expecting to compete with Tencent's WeChat service and reinforce its leading position in the mobile Internet market. However, it won't be that easy, as the Fetion development campaign will last for one year, and it takes time for consumers to accept and get interested in the service, according to industry insiders. (Edited by Luo Jingjing, [email protected]) |