Ministry mulls charging for WeChat

By Song Shengxia Source:Global Times Published: 2013-3-31 23:28:01

The WeChat instant messaging application developed by Tencent Holdings, China's largest Internet company by market value, may no longer be free in the future owing to pressure from the country's three telecom operators, the head of the country's telecommunications watchdog said Sunday.

"The ministry is looking into the possibility of having users pay for WeChat and has asked the operators to submit a plan. But the regulator will consider the impact on users and will not allow high fees to be charged," Miao Wei, head of the Ministry of Industry and Information Technology (MIIT), was quoted by Caixin Media as saying at a forum in South China's Guangdong Province Sunday.

A competition mechanism must be introduced to determine the level of the fee, but the ministry will not allow the three operators - China Unicom, China Mobile and China Telecom - to collude to fix prices, Miao said.

WeChat, a mobile chatting app also known as Weixin, currently offers free text and voice messaging as well as photo sharing services.

The app has attracted more than 300 million users since its launch two years ago and it has become a huge challenge for the text and call services offered by the traditional telecom operators.

In a statement sent to the Global Times Sunday, Tencent said the company's goal is to work with the operators for a win-win outcome instead of competing with them for a share of their profits from traditional communication services.

Media reports last month said that the MIIT had arranged a meeting of the three telecom operators and Tencent to discuss how to supervise Tencent's "over-the-top" business and ways of charging for it.

Over-the-top (OTT) businesses are Internet companies that use telecom operators' online networks to offer audio, video and data services. The business requires a certain amount of the resources of the operators' networks.

"Now is not the right time for operators to demand that Tencent pay for its WeChat app, because Tencent has not commercialized WeChat and is still suffering a loss with it," Sun Peilin, a senior researcher at consultancy Analysys International, told the Global Times.

The three operators were not available for comment Sunday when contacted by the Global Times.

Chang Xiaobing, chairman of China Unicom, the nation's second-largest telecom carrier by number of subscribers, said Sunday at another forum that the current free WeChat service is a preparation for a paid service in the future.

Any practice that violates economic rules will not last long, Chang said, noting that telecom operators and companies offering OTT services should support each other for mutual benefit.

"It is inevitable that operators will charge Tencent for its OTT service in the future. The question is who will pay the bill finally, the users or advertisers?" Ma Jihua, a telecom analyst at Beijing Daojing Consultant Co, told the Global Times Sunday. "A possible solution is that Tencent could find a profit-making model that would allow a third party such as advertisers to pay the fee rather than users," Ma said.

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