China Mobile to Revamp Fetion to Fight Back against WeChat

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A leaked internal report (source in Chinese) by Fetion, the IM service from China Mobile revealed the fact that the rise of Wechat, or Weixin, has really threatened the peaceful life of the biggest carrier in China. However, the telecom giant sill chose to press on and aimed to save the SMS back to life. According to the report, China Mobile has recently convened some internet bases, international companies and mobile research centers on the restructure of Fetion.

After looking back the rapidly developing year of OTT businesses, the carrier now has realized the difficulty carriers shall meet in the future. Two years ago, China Mobile finally opened its door to other carriers and enabled free-texting over other operators’ platforms with a Fetion-based text messaging service.

Currently Fetion enjoys 99.32million active users, up by 15.4% yoy, and 5.31million peak concurrent users, which has grown by 78% yoy. After 2011 China Mobile cut down its input in the messaging services, last year the operating input in Feiliao is less than RMB 5million. This number is not even 1% of how much Tencent spent on Wechat in 2012.

On the other side, wechat legendarily hit 300 million users with 120million active users, and the input bill is over RMB 3billion (800million on operating). Some detailed strategies showed that the carrier had not given up on SMS. Although Fetion’s glory has lost for long, the service actually makes money.

Last year, the accumulated revenues of Fetion added up to RMB 1.722billion and the turnover from games, music and reading reached RMB 16million. The company believed that by restructuring Fetion and integrate its service with other telecom products can it have a firm fight back. Here’s three main strategies from the report, still some familiar ideas from the telecom monopoly can be seen.

  • First, integrate services of Fetion, Feiliao, and other telecom products;
  • Secondly, embed other products like Mobile Contacts or Keyboard Dialing in the messaging services, which enable more users download Fetion by default;
  • Lastly, the whole restructure scheme should go on with handset subsidies or flow packages to attract more users.

image credit: ce.cn