Latest News:  


China Mobile to challenge WeChat

By Shen Jingting  (China Daily)

09:14, April 17, 2013

An advertisement for Fetion, an instant-messaging service provided by China Mobile Ltd, in Yichang, Hubei province. Provided to China Daily

China Mobile Ltd, the nation's biggest telecom operator, has launched public bidding for operating its Fetion service, an instant messaging tool similar to Tencent Holdings Ltd's WeChat.

Previously, Fetion was solely operated by Beijing Ultrapower Software Co Ltd.

China Mobile's move is seen by many analysts as a strategic step to restructure Fetion and take on Tencent's WeChat.

Growth Enterprise Board-listed Ultrapower applied for a one-day trading suspension for "potential major incidents" on Monday. The company resumed trading on Tuesday, but its stock price dropped by the daily limit of 9.99 percent, closing at 18.56 yuan ($3).

China Mobile's Guangdong branch is conducting the bidding process. Four subsidiary projects, worth 638 million yuan, are listed in the tender.

Zhang Qianshan, general manager of Ultrapower's strategic investment department, said China Mobile wants to enhance its presence in the mobile Internet sector.

"An open tender is to introduce competition, which will be good for Fetion's development," he said.

Li Zheren, an analyst with Beijing Gaohua Securities, expected Ultrapower to win the majority of contracts from China Mobile, based on its experience and talent pool.

"Before the announcement of the open tender result, there will be pressure on Ultrapower's stock price in the short term," he said.

Launched in May 2007, Fetion once enjoyed great popularity and attracted hundreds of millions of users in China.

However, the service faded out recently, largely due to strong competition from Internet companies such as Tencent and Sina.

In mid-March, media reports said that Chinese telecom carriers, led by China Mobile, are likely to start charging Tencent for hosting WeChat.

Telecom operators claimed that the WeChat service consumed too much traffic on their wireless networks but returned few benefits.

In addition, fewer people were using the voice and short messaging services provided by telecom operators, which further hampered the carriers' financial performance.

"We have seen the rising strategic position that Fetion holds in China Mobile's business range," said Xiang Ligang, a Beijing-based industry insider. But he expressed pessimism about Fetion's prospects due to Tencent's dominance in the sector.

Kevin Wang, director of China electronics research at IHS iSuppli, said it is good for China Mobile to bring in more powerful partners to its Fetion service.

"New partners may introduce fresh ideas in terms of product design, marketing and may help improve Fetion's user experiences," Wang said.

We Recommend:

Apple CEO apologizes over China warranties

Nokia closes its flagship store in Shanghai

The 10 most expensive houses in China

$52 million super luxury yacht

The many stories behind Apple's bite on its logo

Looking abroad for a new home

Email|Print|Comments(Editor:WangXin、Gao Yinan)

Leave your comment0 comments

  1. Name


Selections for you

  1. French escort vessel arrives for goodwill visit

  2. Airborne troops in parachute training

  3. Venezuela protesters call for full vote recount

  4. People in summer wear in east China

  5. Beijing girl infected with H7N9 recovering

  6. Smartphone users victims of scams

  7. Ten mysteries of emperors' tombs

  8. Yunnan's umbrella spectacle

  9. Gold suffers biggest one-day drop

  10. Bird flu fears hit poultry industry

Most Popular


  1. Quick Comment: 3 meanings of Boston blasts
  2. Great wisdom needed to push Sino-US ties
  3. China Q1 'sound' despite slower growth
  4. Key lessons to improve fiscal transparency
  5. Triple blasts rock Boston, triggering fears of terror
  6. Who makes the massive immigration fraud?
  7. Overcapacity troubles Chinese economy

What’s happening in China

Living the high life

  1. Student poisoned to death; roommate suspected
  2. Chicken farmer hit hard by bird flu scare
  3. Sunbathing, a nightmare of maritime pollution
  4. Online drug deals make it tough for the police
  5. Free lunch stirred by ‘suspended’ coffee rage