Image credit: @linsinchen.
China’s telecoms giants aren’t happy with Tencent‘s upstart messaging app Weixin/WeChat, which they claim is stealing money from their bottom line by allowing users to avoid exorbitant text messaging fees.
The telecoms industry in China is, despite being split into three different ‘companies’, effectively a monopoly. In 2004, as Richard McGregor recounts in his excellent book The Party: The Secret World of China’s Communist Rulers, executives at China Mobile and China Unicom were swapped overnight after Party officials grew worried that something approaching a competitive marketplace was appearing.
It should come as no surprise then that the Ministry of Industry and Information Technology, the body that regulates and maintains the telecoms monopoly, is “looking at the possibility of users having to pay a small fee to the telcos to use the app,” according to Reuters.
Shi Wei, an official at the National Development and Reform Commission echoed the comments in an interview with Xinhua:
If Wechat doesn’t charge a fee, then why do text messages charge a fee? This is basic economics. If text messages charge a fee, then so should Wechat.
Text messages, as anyone with knowledge of the telco industry will tell you, are a giant scam. Messages cost next to nothing for telecoms companies to transmit, despite this they regularly charge customers as much as 10,000,000 percent of the cost.
Shi’s comments are absurd of course, and emblematic of someone who doesn’t understand technology. Weixin is far more similar to email than text messaging, in that it uses mobile data bandwidth or wifi to send messages, rather than the text message protocol.
Tencent has denied claims that it intends to introduce a fee, and with good reason. Charging for Weixin would kill the app, just as it begins to dramatically expand overseas, as users would turn to the many alternatives that are free from the protectionist instincts of Party officials.