China Unicom-WeChat deal to disrupt status quo

Shiv Putcha/Ovum
23 Aug 2013
00:00

China Unicom has entered into a partnership agreement with Tencent’s popular Weixin messaging service. Previously, China’s mobile operators appeared to have closed ranks against Tencent in an effort to exert collective pressure on WeChat.

Unicom’s apparent change of approach is a significant development that will be closely watched by the mobile operator community across Asia.

Operators throughout the region are struggling to find effective responses to OTT services that are impacting their business models, especially the popular messaging apps that are not only generating huge traffic on their networks but also cutting into their core SMS revenue bases.

Unicom’s partnership with Tencent takes the form of a customized SIM card called “Weixin Wo Ka” that has been initially launched in Guangdong province. The name roughly translates as “Weixin Wo Card,” a co-branding that incorporates Tencent’s “Weixin” brand and “Wo,” Unicom’s service brand.

Weixin Wo Ka comes with four packages, which cost 66 yuan ($10), 96 yuan, 126 yuan and 156 yuan, with the different tariffs offering varying combinations of free voice-call minutes and data usage.

Interestingly, these packages sit in the low-middle level of Unicom’s 3G tariff portfolio, underlining the operator’s strategic focus on students.

Subscribers to Weixin Wo Ka will be eligible for five functions offered by Tencent and Unicom: a 50% upgrade in the size of group messaging (from 40 to 60), personal emoji (like emoticons, but with a wider range of images), access to Tencent’s payment platform, 300MB of toll-free use of Wechat, and access to Tencent’s gaming applications.

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