Latest technology gets people talking

Rumors suggest that the days of free mobile voice messaging and texting may soon come to an end, Jiang Xueqing reports in Beijing.

Only two years after the launch of WeChat, the mobile text and voice messaging service developed by Tencent Inc has attracted more than 300 million users.

Kan Kaili, a professor at the School of Economics and Management at Beijing University of Posts and Telecommunications, started using WeChat in November. He was immediately attracted by its convenience for mobile social networking through establishing or joining various groups of friends, colleagues, fellow students and others. As long as they can go online via their mobile phones, users can send text and voice messages as well as photos and small videos to groups or individuals.

"I have joined many groups to connect with my friends," Kan said. "We have group discussions about our work and academic issues on WeChat with overseas academic professionals in the same field joining us."

Another major attraction is that sending messages via WeChat costs nothing; users only pay for mobile data traffic or wireless networks when they cannot get free Wi-Fi access.

Now, Kan rarely uses the text messaging services provided by Chinese telecom operators. Instead, he uses WeChat for both one-on-one and group communication. He has also used the system in preference to international phone calls when traveling overseas. The service has saved him a lot of money.

"If I sent the same number of messages via the text-messaging services provided by telecom operators, I would have to pay several hundred yuan a month," he said.

However, for many Chinese mobile users, the days of sending text and voice messages free of change may soon be over.

'No reason to charge'

In mid-March, rumors began to spread in the media and on the Internet that China's "big three" telecom operators - China Mobile, China Unicom and China Telecom - are likely to start charging Tencent for hosting WeChat and that Tencent could charge WeChat users in return. One rumor, on Sina Weibo, said that from July 1 mobile users will have to pay 0.05 yuan to send a text message via WeChat and 0.10 yuan for a voice message.

Although Tencent has repeatedly denied that it will charge for the use of WeChat, its share price slumped to HK$250 ($32) on April 12 after it reached a record high of HK$286 on March 11. So far, Tencent Holdings Ltd has bought back 6.64 million shares for about HK$1.63 billion during 14 consecutive trading days.

"Telecom operators have no reason to charge users to send messages through WeChat because they have already paid for the data traffic. But the operators might collect fees from Tencent because the volume of traffic on WeChat is particularly high," said Xiang Ligang, secretary-general of the 3G Innovative Applications Forum.

The operators have now realized that the rate they set for WeChat to rent the telecom network was too low. Initially, they had not expected the service to take up a large amount of signaling resources, according to Xiang.

"Users will pay the charges eventually," he said. "Although Tencent dares not charge WeChat users for fear of losing customers, it will find other ways to generate revenue - for example, by offering value-added services."

Some information technology and telecommunications industries experts and professionals are worried that the case will set a precedent for other over-the-top, or OTT, services and hamper innovation.

"Will telecom operators charge commission whenever a successful product appears on the market?" asked Kai-fu Lee, former head of Google China, on Sina Weibo.

It is widely believed - especially among users - that Tencent has taken a significant amount of traditional voice and text-messaging business away from the telecom operators, which has caused them to retaliate.

"As a result of technical innovations, OTT services provide telecom operators with an opportunity for data traffic growth, but they have also become a substitute as well as a challenge to text and multimedia messaging services and even voice services," according to a China Mobile spokesperson in an e-mail to China Daily.

According to the China Mobile's annual report, its wireless data traffic hit 1.04 trillion megabytes in 2012, an increase of 187.6 percent from 2011. Revenue from the wireless data traffic business increased by 53.6 percent to 68 billion yuan ($11 billion).

By contrast, revenue from voice services, which accounted for 66 percent of China Mobile's total operating revenue, increased by just 1.1 percent. Revenue from short message and multimedia messaging services fell by 4.8 percent.

"Monopoly is the essence of the fight between the telecom operators and Tencent," said Du Zide, secretary-general of the China Computer Federation. "If we have full market competition in the telecommunications sector, each company will make great efforts to improve its own service capacity, rather than trying to increase its revenues by adding a new charge."

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