China Telecom in JV with NetEase to launch YiChat messaging app

China Telecom and NetEase will launch YiChat instant messaging application for smart phones. This is to address OTT challenges.

Both the companies have established a joint venture to kick off instant messaging app business.

NetEase, an Internet technology company in China, operates online games, e-mail services, advertising services and web portals in China.

YiChat users can send free text and voice messages to any mobile phone or free voice messages to fixed lines, without the need for YiChat to be installed on the receiving devices.

China Telecom is planning to spend around $12 billion as capital expenditure (Capex) in 2013. Last year, China Telecom’s Capex was $11.66 billion (72.525 billion yuan). In 2013, China Telecom is planning to spend 20 billion yuan for mobile infrastructure expansion and 55 billion yuan for wireline expansion.

China Telecom in JV with NetEase to launch YiChat messaging application

YiChat offers environmental noise reduction technology, photo messaging and various original stickers and emoticon designs. Moreover, all China Telecom users can enjoy additional free data promotional packages with their use of YiChat.

Telecom industry analysts consider this move as a strategy to counter OTT challenges.

“The joint venture with NetEase and the launch of YiChat is a crucial step in China Telecom’s strategic transformation,” said Jie Yang, president and COO of China Telecom.

China Telecom is targeting to make YiChat one of the most popular social instant messaging applications for young people in China.

“Our strategic joint venture with China Telecom aims to provide a superior social instant messaging application for smart phone users,” said William Ding, CEO and founder of NetEase.

This joint venture signals NetEase’s entry into the mobile instant messaging space. It’s one of the key components of our mobile Internet strategy.


According to Mobidia Technology, established apps and services such as China’s Tencent and Microsoft’s Skype continue to release new functionality and push into new markets.

Many mobile operators including T-mobile, Vodafone, and Telefonica, launched or grew propriety and joyn-based solutions in the space. Options for subscribers will increase throughout 2013, yet the leading options will vary widely depending on country or geography.

The market for mobile messaging and VOIP is highly fragmented with hundreds of applications available and often 10 to 20 applications showing significant usage for a given geography or country. WhatsApp continues to enjoy leadership in both penetration and usage in many countries.

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