Tag Archives: China Mobile

China Mobile latest Business & Financial news from Doug Young, the Expert on Chinese Companies, (former Journalist and Chief editor at Reuters in Asia)

WeChat’s Hubris Could Open the Door to Needed Competition

Bottom line: WeChat’s growing hubris, reflected by increasingly aggressive content filtering, could open the door to a more user-friendly competitor.

WeChat gets overly agressive with word filtering

These days the following exchange seems to happen with growing frequency at companies around China.

Person 1, yelling across the office: “Did anyone see my message about [insert name of any random subject]?”

Colleague, yelling back: “Uh, don’t think we saw that one. Maybe it was blocked.”

Many in China will probably recognize what I’m talking about, but for those outside perhaps a bit more explanation is needed. The above dialogues are all talking about messages being blocked on the hugely popular WeChat instant messaging platform, which has become an integral part of most people’s social and work lives in China these last five or six years.

As readers can probably guess from the above dialogue, WeChat has become more aggressive over the past year in filtering its content for sensitive words. The service is hardly alone in such practice, since China’s cyber security law says all website and app operators must police themselves for and remove such content.

But when you talk about this kind of self-policing, it’s really up to the individual websites and apps to decide what to look for and remove. In WeChat’s case, it seems like the company has gotten lazy lately and begun filtering a growing number of keywords and topics, often without any obvious sensitive content. The result is that you often send a message or file and wait patiently for a response, only to later learn the post was never received by the intended recipients.

Rather than delve into the politics of what’s happening at WeChat, which declined to comment on its filtering policies, I want to focus the rest of this column on a more business-related topic that could have huge implications for WeChat and its parent, Tencent (HKEx: 700). The topic revolves around a basic question: Could WeChat’s recent policies turn off large numbers of its more than 1 billion users, and open the door for another more user-friendly rival?

To answer that question, I did one of my unscientific polls, putting a set of questions to my 2,000-plus friends and contacts on the very WeChat service that’s the subject of this column. The results were quite revealing, and seem to indicate that people aren’t quite ready to abandon WeChat just yet. But it could just be a matter of time if things keep up at their current pace.

More on that soon. But first I’ll quickly summarize WeChat’s current status to give people outside China a sense of how ubiquitous it has become in many people’s daily lives, mine included. I previously wrote about how entrenched WeChat has become as a work tool for many, providing convenient and cheap ways to hold all kinds of group and individual chats and calls over a wide range of distances.

Many people also use the platform these days for a big chunk of their online social interaction, including written and voice communications and group sharing through its Moments function that is similar to Facebook’s newsfeed.

And the survey says …

With all that background in mind, we’ll spend the second half of this column looking at my survey results and what they might say about whether WeChat’s filtering ways could provide a business opportunity for a smart rival app operator. My polling query returned 13 meaningful results, covering a wide range of industries that seemed somewhat representative.

Of the 13, seven said they had noticed the increased filtering and were frustrated by it. Three of those were from the media due to my own leanings, with others coming from such industries as education, international trade and other services. That does seem relatively significant, since it shows there’s a bit of discontent out there that a savvy alternate service provider could feed upon.

Most people who noticed the increased filtering said they were seeing it mainly in group chats, though one or two said they were seeing it in one-on-one messages as well. That said, no respondents said they were considering switching to other platforms as a result of their frustration. I would agree that at this point WeChat is so entrenched in my daily work and social routines that things would either have to get even worse, or an obviously better alternative would have to spring up for me to consider switching.

I particularly liked one response from a former student. She noted the change has been happening gradually over the last year and a half, and likened it to “using warm water to boil a frog” — in other words, a form of torture that’s so slow you may not even notice until it’s too late.

WeChat has certainly faced its challengers over the years, though in each case it fended off the competition with relative ease. One of the earliest assaults came from mobile giant China Mobile (HKEx: 941; NYSE: CHL), which accused WeChat of effectively being a rival network operator. E-commerce giant Alibaba (NYSE: BABA) would later try to mount a challenge with its Laiwang service, which ended in failure.

Last year a service called Bullet Messenger briefly surged into headlines as its downloads soared, though that also seems to have disappeared. And most recently, TikTok owner ByteDance in May launched a new challenger app called Flipchat.

So far I haven’t downloaded any of these apps, mostly because WeChat was providing me with perfectly good service at the time. But this latest behavior by WeChat is showing just how companies can abuse their position when they become near monopolies. Accordingly, I wouldn’t be at all surprised to see a new rival emerge in the next year — possibly quite suddenly — if WeChat continues in its current ways.

TELECOMS: China Hits 5G Accelerator, But Will Telcos Bite?

Bottom line: China’s telcos won’t accelerate their 5G network building even if licenses are issued earlier than expected this year, though foreign equipment suppliers could benefit if Huawei is hobbled by the US-China trade wars.

5G coming to China sooner than expected?

What a difference a decade makes. That’s about how long has passed between China’s issuing of 3G wireless licenses and the upcoming issue of 5G licenses two generations later. I remember in the 3G era how China dragged its feet forever, and finally issued licenses several years after the rest of the world. This time around it appears to be moving more quickly, driven by what appear to be political and economic factors.

The topic has popped into the headlines again this week with word that China’s telecoms regulator will “soon” issue 5G licenses. (English article) The signals coming from the Ministry of Industry and Information Technology (MIIT) have been pointing to a release of licenses this year all along. But this could mean that will happen sooner rather than later, since many were previously expecting licenses toward the end of the year. Read Full Post…

TRADE: Micron, China Mobile Muddy US-China Trade Tensions

Bottom line: A court order barring Micron Technology from China and Donald Trump’s attempts to keep China Mobile out of the US reflect blurring lines between business and politics in heightening US-China trade tensions.

Fujian court bars Micron sales in China

Two new headlines are showing how trade tensions between the US and China are spilling over into the high-tech realm, while also reflecting a certain amount of confusion and twisting of the facts. Leading the somewhat misleading headlines is an item that has U.S. memory chip giant Micron (Nasdaq: MU) suddenly being shut out of China for a number of its products due to a patent dispute. The other headline has Donald Trump saying that leading Chinese telco China Mobile (HKEx: 941; NYSE: CHL) shouldn’t be allowed to offer services in the US due to national security concerns.

The Micron story is being spun by some media as having a US-China trade tensions angle, when really that’s not the case and it’s just a typical patent dispute. The same could be said for the much larger case involving a US ban on telecoms equipment maker ZTE (HKEx: 763; Shenzhen: 000063), which is being spun as part of US-China trade tensions, even though ZTE is being punished for violating much older US sanctions against sales to Iran. China Mobile, on the other hand, is clearly a Trump pet project and does reflect his protectionist tendencies. Read Full Post…

TELECOMS: China Mobile 4G Users Decline for First-Time

Bottom line: China Mobile’s first-ever drop in 4G subscribers in April owes to the company’s early arrival to the space, and reflects the broader market’s maturation that is also adding similar pressures to Unicom and China Telecom.

China Mobile 4G users takes first-ever dip

Much ado is being made about new data from the three big telcos that includes a first-ever drop in 4G subscribers for industry heavyweight China Mobile (HKEx: 941; NYSE: CHL). This particular first seems to have been a long time coming, and really shouldn’t surprise anyone too much. The fact of the matter is that China’s mobile market has been nearing saturation for a while, and the nation’s big 3 telcos have been increasingly stealing customers from each other for the last two or three years as the number of unserved users dwindles.

The bigger question raised by this data is what the slowdown could mean over the longer term, when China Mobile and smaller peers Unicom (HKEx: 762; NYSE: CHU) and China Telecom (HKEx: 728; NYSE: CHA) might see slow or negative growth in subscriber terms. The answer to that question is that this trio will be able to feast on their protected home market for many years to come, though they may be forced to innovate a bit more in order to get a tapped-out audience to keep paying more for services. Read Full Post…

TELECOMS: 5G Buzzes Early Into China

Bottom line: A bevy of signals from Beijing indicate China will roll out 5G networks around 2020, in step with major Western markets, providing a boon for telcos, equipment sellers and Internet companies.

China gets serious on 5G

After years of watching China following years behind the West in rolling out its next-generation wireless networks, there are growing signs that the country intends to be a leader rather than a laggard with upcoming 5G service. The latest signal in that drive is coming from the country’s state planner, which has just announced that five or more cities will start to build rudimentary 5G networks starting next year.

All this may sound quite boring for many of my readers who are more interested in high-tech companies than stodgy telecoms carriers. But it really has huge implications for not only China’s big 3 telcos, but also the nation’s booming Internet industry that will become the direct beneficiaries of 5G networks that offer data speeds that are well ahead of what you can get from current 4G technology. Read Full Post…

TELECOMS: China Telecom Displays Aggression, Unicom Conservatism

Bottom line: China Telecom’s aggressive bidding for a government contract highlights its more entrepreneurial style, while Unicom’s latest announcement on its private ownership plans reflects it conservative, bureaucratic style.

Unicom mixed ownership program crawls ahead

Two of China’s trio of wireless telcos are in the news today, reflecting an effort by Beijing to breathe some life into these laggard state-run behemoths that always seem unable to realize their potential. The first headline has China Telecom (HKex: 728; NYSE: CHA), the smallest of the nation’s 3 carriers, making an aggressive bid to essentially provide services  for free to a government agency in northeast Liaoning province. The second has Unicom (HKEx: 762; NYSE: CHU), the second largest carrier, disclosing some more details on its plan to introduce some private capital to the company. Read Full Post…

TELCOMS: China Telecom Eyes 5G Network Sharing

Bottom line: China Telecom, Unicom and China Broadcasting Network could share the costs of a 5G network to lower costs, while China Mobile is likely to construct a network on its own.

China telcos consider 5G network sharing

As earnings season reaches a crescendo, wireless carrier China Telecom (HKEx: 728; NYSE: CHA) is raising an old theme by saying it might consider sharing resources with someone else in building a next-generation 5G network. This particular topic first surfaced more than a year ago when China Telecom and rival Unicom (HKEx: 763; NYSE: CHU) studied the possibility of sharing 4G resources, even though they ultimately each built their own networks. (previous post)

The interesting twist this time is that Beijing is rolling out a program to inject private capital into the telecoms sector, meaning perhaps China Telecom and the other telcos could be allowed to pick private-sector partners for their 5G networks. Another interesting wrinkle comes in the form of a fourth state-run telco that was assembled from the nation’s many cable TV companies last year and would probably like to have its own telecoms network. Read Full Post…

TELECOMS: VNO Movement Finally Gains Traction

Bottom line: China’s VNO program appears to be gaining momentum heading into its third year, and could reach the 200 million subscriber mark by the end of 2017.

Virtual network operators gain momentum

It’s been more than a year since I last wrote about China’s fledgling attempt to breathe new life into its telecoms services sector by creating virtual network operators (VNO), mostly because the program seemed to be sputtering in its first couple of years. But new data from the telecoms regulator seems to suggest the industry may finally be finding its legs, and could be starting to take some meaningful market share from the nation’s monopoly of 3 big state-run telcos.

The headline figure underpinning my assertion is 43 million, which appears to be the number of VNO subscribers in China at the end of last year. (Chinese article) I need to give a quick disclaimer here, as nowhere in the article is the term VNO or variant MVNO used to describe this sector, which is called the “mobile resale business”. But that term, combined with a description of the program, does seem to indicate that these are VNO subscribers. Read Full Post…

TELECOMS: China Telecom Spins Off Content Units

Bottom line: China Telecom’s sale of several key entertainment assets to a separately run and listed unit reflects the company’s more dynamic nature compared with its 2 peers, as it tries to create services that can compete with private-sector rivals.

China Telecom (HKEx: 728; NYSE: CHA) is showing once more why it’s a telco to watch, with word that it’s formally spinning off 4 of the main entertainment businesses on its main E Surfing platform to one of its independently run and listed units. In this case the telco is spinning off the four to its fully-owned but separately managed Besttone Holdings (Shanghai: 600640) unit, in what looks like a bid to make these services more competitive with private sector rivals. Read Full Post…

TELECOMS: Unicom Seeks New Life with BAT Magic

Bottom line: Unicom is likely to choose all 3 of the BAT companies as equity and strategic partners under Beijing’s pilot program to invigorate big state-run companies, but none of the tie-ups will produce meaningful results.  

Unicom eyes BAT partnerships

China Unicom (HKEx: 762; NYSE: CHU), the perennial laggard among China’s 3 major telcos, is reportedly looking for new life by tying up with the nation’s big 3 Internet companies, Tencent (HKEx: 700), Alibaba (NYSE: BABA) and Baidu (Nasdaq: BIDU). I might normally say “so what?” to this particular development, since it seems like Unicom and its 2 fellow state-run telcos are regularly announcing this kind of partnership, always with little or no meaningful impact on their business. Read Full Post…

China News Digest: October 21, 2016

The following press releases and news reports about China companies were carried on October 21. To view a full article or story, click on the link next to the headline.
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  • China Mobile (HKEx: 941) Announces Financial Results for First 3 Quarters (HKEx announcement)
  • Homestay Business of Ctrip (Nasdaq: CTRP) and Qunar Acquired by Tujia (PRNewswire)
  • China iOS App Store Passes US in Sales to Become World’s Largest – Report (Chinese article)
  • Walmart (NYSE: WMT) Opens Flagship Store on JD.com (Nasdaq: JD) (Chinese article)
  • Giant Interactive to Buy Online Game Maker Playtika for 30.5 Bln Yuan (Chinese article)
  • Latest calendar for Q2 earnings reports (Earnings calendar)