Tencent on Wednesday said its revenues from social messaging networks (OTT) — WeChat and QQ — rose 3.7 percent in the third quarter of 2013, despite a 124 percent increase in the number of active WeChat users during the same period.
Slow year-on-year growth in social messaging or OTT revenue is a concern for Tencent.
But it will be good news for telecom operators such as Bharti Airtel, Idea Cellular, etc. In October, China Mobile, the #1 telecom service provider in the world, said that its revenue and profit in the third quarter were affected by free messaging players in China.
Telecom service provider Idea Cellular on Thursday said messaging companies (OTT players) have impacted its non data VAS services revenue. the non data VAS revenue as a percent of service revenue has fallen to 7.4 percent, drop of 2.8 percent contribution over the year. On the other hand, Idea Cellular Value Added Services (VAS) contribution in second quarter increased to 16.1 percent from 15.6 percent in Q2 FY 2013. ( OTT impacts Idea Cellular non data VAS services revenue )
Social messaging services are trying to find alternatives to boost revenues. In August, WeChat announced the launch of Version 5.0. The free smartphone messaging application boasts several new payment services, including an emoticon ‘sticker store’ where users can pay to download graphical images to attach to their messages.
Launched in January 2011, WeChat has around 400 million by the end of June, according to data supplied by the Ministry of Industry and Information Technology.
Analysts earlier said the app’s future lies in the development of add-on services that must be paid for. Moreover, the company wants WeChat users to link their account to a bank account. The latest version of WeChat is connected to an online payment service. It allows users who like to add emoticons to their messages to buy stickers. The graphics will cost HK$8 each in Hong Kong and six yuan (HK$7.60) on the mainland. The updated version of WeChat also features a gaming centre, said a media report.
Meanwhile, Reuters reported that Internet firm Tencent Holdings said its third-quarter net profit rose 20 percent to $635.27 million. Revenue growth in the third-quarter was 34.3 percent to 15.54 billion yuan.