Challenge of IM inspires new China Mobile plan

By Shen Jingting (China Daily) Updated: 2014-02-28 08:22

China Mobile promotes 4G services in Qingdao, Shandong province. The company announced a plan that it said will help converge the functions of the phone, contacts and messages in customers' mobile phones. Huang Jiexian / China Daily

Analysts doubt that China Mobile's move is a sign it is exiting the traditional text-message business and moving wholeheartedly toward data operations. However, Ge Qi, deputy head of China Mobile's general affair department, said the company will not abandon short text message services but will upgrade its operational model.

China Mobile's business at best flattened or even shrank over the past two years after mobile applications such as WeChat, an instant-messaging tool developed by Tencent Holdings Ltd, lured a huge amount of people to real time communications, rather than sending text messages or making calls in the traditional way.

During the eight-day Spring Festival holiday, Chinese people sent about 18.2 billion text messages, down by 42 percent year-on-year, according to the Ministry of Industry and Information Technology. It was the first time in 10 years that China saw a drop in the rate of its Chinese New Year blessings messages.

In contrast, the average mobile network data traffic per capita rose by 63 percent to 46.6 megabytes during the same period.

According to iResearch, a Chinese research firm, about 20 percent of the total blessing messages sent in China during the Spring Festival were via WeChat.

"If China Mobile does not transform, it has no way out," said Fu Liang, a telecom analyst. "But what measures a successful integrated communication service does not lie in how many smartphones install the service, but in how many Internet companies join in to contribute to the service," Fu said.

Five mobile phone manufacturers, including Samsung Electronics Co Ltd and Huawei Technologies Co Ltd, have publicly expressed support for China Mobile's new service.

"We hope more mobile phone vendors will partner with China Mobile to advance the service. We always hold an open cooperation attitude," Li said.

Huang Meng, a telecom analyst with Beijing-based investment company Eagle Stone Investment, said if China Mobile fails to attract enough clients to use its integrated service, then the service may fade away gradually. "For example, besides WeChat, what other mobile applications have gained in popularity?" Huang asked.