Look out WhatsApp, there's another disruptive player in mobile chat: carriers
Thanks to mobile chat services such as WhatsApp, WeChat, and KakaoTalk, as well as Apple's iMessage, SMS is dying a fast death as a money-maker for carriers around the world. So what does a telco do when one of its key revenue streams is being usurped by Internet interlopers?
Well, apart from squeezing the last few pennies out a bygone model, perhaps all they can do is join the party – or attempt to disrupt it.
It hasn't been much talked about in the tech press, but in February T-Mobile launched its own IP chat product, Bobsled. Built by Burlingame-based HDMessaging, the app lets users send rich-media messages to fellow users for free. Now, perhaps more significantly, HDMessaging has built a similar product for Globe Telecom, the second biggest carrier in the Philippines, which is a huge and growing mobile market. Perhaps surprisingly, it does have a key advantage over its Internet competitors: inter-operability.
There were nearly 94 million mobile subscribers on all networks in the Philippines at the end of 2011, according to Globe's figures, and some industry watchers call the country the "text capital of the world." While SMS has been on the decline in the Philippines in the last couple of years, short-form messaging remains a popular method of communication in the country.
WhatsApp has been doing particularly well in the Philippines, where most mobile users are on prepaid devices rather than contracts, meaning every penny saved counts that much more. But, as users increasingly switch to smartphones, the market is still wide open, meaning one mobile chat app with the luck and skill to capitalize on viral social networking effects could still claim a dominant position.
Globe's Gmessage is potentially significant for a few reasons. Number one is that mobile chat services are utterly dominating in Asia, much to the consternation of carriers that are seeing their SMS revenues evaporate. In South Korea, KakaoTalk has more than 50 million users, and LINE is enjoying similar popularity in Japan. In China, Weixin – or WeChat, in English – has 200 million users. Alongside WhatsApp, all three are intent on scrapping for the Southeast Asian markets, where the text-message culture is highly developed.
Until now, carriers in Asia haven't had a strong player in the game. However, Globe is offering a legitimate alternative to the Internet companies. Gmessage's advantage is that it doesn't restrict its users to one platform or network. Users can use it to communicate with others for free – including sending voice messages, videos, and pictures – but it can always send messages to people outside the Globe network, and to people who aren't using Gmessage, for a small price ($.004) each time. So, while WeChat, Whatsapp, and KakaoTalk fight among each other for an increasingly fragmented market, Gmessage can come in and say, "Hey, forget about those walls – we'll send your messages anywhere."
It'll be a tough sell. Carriers are distinctly unsexy, especially in the Facebook-mad Philippines, which is the social network's eight-largest market in the world. It may turn out that consumers are more than happy to just use Facebook for their mobile communications. It's also highly likely that the number one carrier, Smart, will quickly follow suit. Finally, Gmessage will have to draw users away from Whatsapp, or whatever other chat services to which they are habituated, which will be far from easy.
Still, there's a long road ahead, and this one of the first strong moves by a carrier to enter the space. There'll be more such moves ahead. HDMessaging says it is also building and testing services for four operators in India and two elsewhere in Asia.
[Photo credit: Flickr user Macinate]