The Next Big Thing

China Mobile teaming up with ZTE to take on Tencent's WeChat

PUBLISHED : Tuesday, 17 March, 2015, 10:57am
UPDATED : Tuesday, 21 April, 2015, 11:12am

China Mobile, the country's leading mobile phone and data serivces provider, may soon launch a new real-time messaging solution to challenge Tencent’s popular WeChat service as Chinese mobile phone users increasingly spend less time talking and more time messaging.

China Mobile is teaming up with telecommunications firm ZTE to develop Rich Communication Services (RCS) facilities. ZTE, currently the sole builder of China Mobile’s RCS technology, said once the RCS service is rolled out, it could poise real challenge to WeChat, currently the most popular instant messaging service with Chinese users. 

China Mobile has longed been plagued by WeChat, which has largely replaced the short messaging services (SMS) offered by traditional telecoms carriers. Chinese operators even at one time tried to restrain the fast growth of WeChat.

RCS is a platform developed by a global association of mobile operators, that enables the delivery of voice and SMS, instant messaging, live video and file sharing across various devices.

In comparison, OTT or over-the-top, refers to a range of online or "value-added" services that people are able to use for free over their mobile network. Some popular OTT services include Skype, Line, Viber, WhatsApp, KakaoTalk and WeChat.

China Telecom teamed up with internet portal Netease to launch a service called Yixin in 2013, but this proved a poor rival to WeChat despite the high hopes of its backers. E-commerce giant Alibaba also launched a similar product, Laiwang, but also struggled to gain market share against Tencent's dominant messaging app. 

ZTE believes the RCS that it is helping China Mobile to build will be different.

“This is the trump card China Mobile has in hand to compete with over-the-top services,” said Fang Hui, vice president of ZTE.

“This is one of the strategic businesses of China Mobile facing the future.”

The mainland’s largest telecom carrier aims to gain 16 million users by the end of this year. Its confidence is based on its fast growing pool of 4G users, which topped 100 million in February after being launched for just a year. The company hopes to sign up 250 million 4G users by the end of the year.

The key difference between RCS and OTT services, is that it will be a native function embedded into the hardware, rather than an application that must be downloaded.

“Service quality of RCS is much reliable than that of OTT, things like losing your message will never happen because it is on the network owned by operator,” Fang said.

“Every RCS account is based on a mobile telephone number so you know there is a real person behind it," he said, adding that this could help improve security for users. 

Internal testing has started among 550,000 China Mobile employees, Fang said, and the service is expected to launch later this year. The second phase construction of China Mobile’s RCS will begin in the second half of the year.

“It depends on the development of China Mobile’s 4G projects, but I believe the construction of RCS will be faster than the plan,” he said.

First phase construction will be finished by the end of this year, with the capacity to support 100 million active users on RCS. Fang said he couldn’t forecast how many users will be using this service within this year but “the potential is big”.

Xiang Ligang, the founder of telecommunications portal CCTime, said it is hard for operators to challenge WeChat because users don’t need two instant messaging platforms.

“RCS has to prove that it has more value than WeChat,” he said. “If it is roughly the same service, then it is just a follower.”