With the launch of 5G-based messaging service, can China's telecoms carriers challenge WeChat?

SMS may already be a relatively unfamiliar word. For ordinary users, it is more like a tool for viewing various "verification codes". But now, it is time for the SMS app to say goodbye to the situation.

On April 8, China's three biggest telecoms carriers including China Unicom, China Mobile, and China Telecom held an online press conference to announce the "5G White Paper." The white paper shows that 5G-based messaging service is a new upgrade of the terminal's native basic message service, which will break the length limit of each message in traditional SMS. At the same time, the content of the 5G-based messages will also break through the text limitation, and achieve the effective integration of text, pictures, audio, video, location and other information. Enterprises can also interact with users through 5G-based messaging service.

According to official GSMA data, it is estimated that by 2021, the global market for 5G-based messaging service industry will reach $ 74 billion. Meanwhile, the 5G-based messaging service that has been upgraded on both the consumer side and the commercial side may be an opportunity for operators to overtake WeChat after Fetion.

5G-based messaging service's omnipotent mini program

At the press conference, the operators stated that 5G-based message is a comprehensive upgrade of native messages. The current SMS also has a limit of 150 characters or 70 Chinese characters. However, under 5G-based RCS, users will be able to exchange text messages, photos, video and audio directly via the message window on their phones. In nature, 5G message is more like the current chat app.

Actually, 5G-based messaging service's great potential comes from the B side. Dong Xin, deputy general manager of China Mobile, said that 5G-based messaging service is a common choice for global operators. Based on the unified GSMA RCS standard, it will bring customers new experiences such as multimedia messaging, commercial messaging, intelligent messaging, interactive services, and security anti-counterfeiting. Enterprises can output personalized services and consultations to users through rich media such as text, voice, and tabs.

For example, in the dialogue with 12306, the user can quickly achieve the operations of ticket booking, payment, endorsement and others by sending voice or text, clicking keywords. From this point of view, 5G-based messaging service is more like a popular mini program for the B-end industry, which enables users to complete multiple actions in one communication interface.

Not only China's three biggest telecoms carriers, but also operators around the world show a great interest in 5G-based messaging service including RCS. According to official data of GSMA, it is estimated that by 2021, the global market of RCS based on the message industry will reach $ 74 billion. By this year, 200 operators will release commercial RCS.

Timing is more important than the start

Students who have used the function phone may still remember the days of non-stop text message after 2000. With the advent of the mobile Internet, instant messaging apps such as WeChat quickly replaced the previous text messages and became the main application for people to communicate, which make operator's SMS business suffer a disastrous decline.

China Mobile once broke the news that it would charge WeChat. The fundamental reason is that the Internet applications running on the operator's network have accumulated a large number of users and revenue, while the "bottom" operators only have a small dividend. Although Mobile launched the Fetion service as early as 2007, in the end, it failed to become a national application like WeChat. Instead, it was defeated by the attack of Internet applications.

In the era of mobile Internet, the text messaging application that people seldom mentioned has basically become a "verification code collector." But in fact, it's this function that gives the SMS business a chance to develop at the B end. The data shows that from January to February 2019, the national mobile message service increased by 17.3% year-on-year, and the mobile message service revenue reached 6.04 billion yuan, with a year-on-year increase of 5.3%. The upward trend of the SMS business is mainly driven by applications such as service login and identity authentication. The demand for enterprise-level SMS services is large, which provides sufficient momentum for operators' SMS business income.

Therefore, 5G-based messaging service may not be able to capture customers from instant messaging applications. But at least, it can still be used as an "upgrade SMS" image, which will have a success on the B end.

Of course, the success of 5G-based messaging service depends on the popularity of 5G technology. At present, the three major operators have built and opened 164,000 5G base stations nationwide. In terms of terminals, in the third quarter of 2019, the number of China's 5G mobile phone shipments reached only 485,000. However, operators are still very confident about the popularity of 5G mobile phones. China Mobile predicts that 5G mobile phones will reach 150 million this year, surpassing 4G mobile phone shipments.

As terminal manufacturers, Xiaomi, Huawei, ZTE, OPPO, Vivo and other companies also expressed support for 5G-based messaging service at the press conference, saying that they will be joining forces to try and take a slice of the country's messaging market with a 5G-based service. Mobile phone manufacturers such as Huawei and ZTE subsequently announced that they will start supporting commercial 5G information in June.

This is an article from WeChat official accounts GeekPark(ID: geekpark), translated by Chris Yuan.