Microsoft's Skype to run under new joint venture in China

PUBLISHED : Tuesday, 12 November, 2013, 3:30am
UPDATED : Tuesday, 12 November, 2013, 3:30am

Skype, the instant messaging and online voice-and-video-call service owned by Microsoft, will be relaunched in mainland China under a new joint venture, following the end of a long-standing alliance in the market with Tom Group, the Li Ka-shing-controlled media conglomerate.

Tom last week advised Skype users on the mainland, where the service has been run under the Tom-Skype venture since October 2004, that Microsoft would be taking over this online business with effect from November 24.

In a statement released yesterday, Judd Harcombe, the head of global market development at Skype, said a new joint-venture partnership on the mainland would soon be announced.

"In [mainland] China, Skype software is made available through a partnership to comply with established procedures to meet obligations under local laws," Harcombe said.

We [aim to make] the transition seamless for our users

"We are committed to making the transition seamless for our users and look forward to Tom's continued assistance."

A Tom spokeswoman yesterday said the company had no comment on Microsoft's plan to get a new partner for Skype on the mainland.

Ken Yeung Kwok-mung, Tom's chief executive, said last Friday: "Our focus will be on e-commerce, mobile internet as well as high-definition video communications services."

Microsoft acquired Skype for US$8.5 billion on May 2011 and initially ran the service as a separate division.

A sweeping reorganisation by Microsoft in July has since put Skype under the company's applications and services group, led by Shanghai-born executive vice-president Lu Qi.

Harcombe said Skype had more than 300 million users around the world, but did not break down country-specific numbers.

Ricky Lai, a research analyst at Guotai Junan International, said Skype under a new joint venture "would still find it tough to compete on the mainland against Tencent's popular platforms QQ and WeChat and those of other local players".

Efforts by Skype to expand its online voice-and-video-call service on the mainland have been hampered by tight industry regulation.

Domestic telecommunications network operators have also been lowering their tariff plans to stay competitive.