MIIT Coordinates Telco Plans to Charge for WeChat
Beijing Times, 4/01/13
At Sun Yat-sen University's second annual Lingnan Forum on March 31, Ministry of Industry and Information Technology (MIIT) director Miao Wei said that the MIIT is coordinating plans by telecom operators to charge for Tencent's (0700.HK) WeChat (Weixin) mobile messaging application. In his remarks, Miao noted that WeChat had never been completely free - as users have always had to pay operators the mobile data fees associated with its use. The MIIT will consider "reasonable requests" by operators for other billing plans, but will absolutely forbid operators from exploiting their positions as monopolies to limit WeChat and other value-added services. Miao said that prices for WeChat would not go up sharply, emphasizing that operators "mustn't strangle good companies like Tencent." In addition, Miao said, rather than presenting a united front, operators will be required to negotiate separately with Tencent and other service providers.
At the China IT Summit in Shenzhen on the same day, China Unicom (NYSE: CHU; 0762.HK; 600050.SH) chairman Chang Xiaobing once again spoke of the service as being "free today, for-pay tomorrow," and expressed the hope that Unicom and OTT companies like Tencent would be able to develop healthy, inter-reliant relationships.
Tencent chairman Pony Ma, who also spoke at the event, echoed Chang's description of operators and OTT companies as "like fish and water." Addressing operators' complaints regarding WeChat's use of operators' signaling channels being disproportionate to the data traffic generated, Ma noted that the majority of WeChat's use of signaling resources is on traditional 2G and 2.5G networks. After conducting internal research, Ma said, Tencent has found that operators used flawed methodology in collecting data: operators recorded only data going to and from Tencent's servers, as opposed to a much vaster amount of data traffic to and from Tencent's content-delivery network (CDN) servers. In addition, Ma said, a large amount of WeChat content contains external links to audio and video content, constituting WeChat-generated traffic for operators.
Editor's Note: For more background on this topic, please see "China Mobile Responds to Rumor of Charges for WeChat" MD 3/22/13 issue and .
Keywords: regulation Miao Wei Pony Ma Chang Xiaobing mobile data wireless Tencent MIIT 0700.HK WeChat tariffs mobile IM
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