China’s useless state telcos, which pay lip-service to the idea of competition but are really all one big monopoly, are not fans of Tencent’s WeChat/Weixin, which they blame for biting into their text messaging revenues.
While we’ve got used to criticism of WeChat from the telcos this year, China Mobile vice president Li Zhengmao’s recent salvo takes the prize for bare-faced hypocrisy. Speaking at the World Economic Forum in Dalian, Li attacked WeChat for being a “monopoly”.
Approximately two thirds of mobile subscribers use WeChat according to Li, which amounts to the monopolising of mobile messaging by Tencent unlike, say, China Mobile’s 70 percent market share of domestic telecommunications services which is the absolute epitome of free competition.
China’s telecoms have held onto their monopoly position thanks in part to government blocks on would-be competitors. More importantly, that monopoly is now being threatened by Internet companies that sit well outside the closely controlled carrier industry. Earlier in the discussion, Mr. Li acknowledged that China Mobile “felt insecure” about the rise of WeChat, which last month had 236 million monthly active users, according to the company. China Mobile has repeatedly said companies like Tencent are eating away at revenue it gets from text messaging and voice calls.
China Mobile has long been the beneficiary of protectionist policies taken by the Chinese government against potential foreign competition, what’s interesting about the telco vs Tencent battle is that WeChat is one of China’s most successful tech exports. Protecting the increasingly obsolete and anti-competitive telcos at the expense of modern, privately-owned companies would send a sinister message to entrepreneurs and businesspeople in China.
[Image credit: @thetenthdragon]