China Mobile, the largest telecom operator in China, saw higher than 20% decrease in text message business in the first fourth months of this year, thanks to mobile messaging apps such as WeChat (aka Weixin), Li Yue, CEO of China Mobile, disclosed at the annual shareholders’ meeting. In 2013 the SMS business declined by 15%.
The voice calling business began declining too.
Forced to transform businesses, China Mobile’s telecom service division shifted focus from voice calling and text messages to data business. The company saw 24% increase in data sales in 2013, representing 35% of the division’s total revenues.
However, there’s concern on how fast the data business can grow as a majority of China Mobile’s 780 million subscribers are still on 2G network, whilst the company has introduced iPhones earlier this year and has been investing heavily in 4G infrastructure and even on research of 5G network.
Earlier this year there was a rumor that the three Chinese state-owned telecom operators were in talks to form a company in order to avoid duplication of investments in infrastructure. Xi Guohua, president of China Mobile, confirmed that, saying the company is expected to be established in the third quarter of this year. That company, named something like iron tower, will possibly even introduce private investments, Xi said. The three telcos then will rent infrastructure from the company instead of building everything on their own. (source in Chinese)