China Mobile Communications Corp, the larger of the country's two mobile operators, has launched an instant messaging (IM) service trial with its own brand.

 

The move could be a blow for IM providers such as Microsoft's MSN division and China's Tencent, which have been seeking to extend their PC-based IM services to mobile phones.

 

A spokesman with China Mobile told China Daily that the firm has yet to set a timetable for a formal launch but "it could come soon."

 

Branded as Femoo, China Mobile's IM tool enables handset users to chat with other Femoo subscribers, either with a mobile phone or a PC, in an interface roughly the same as MSN messenger and Tencent's QQ.

 

A website affiliated with Beijing Mobile, www.m161.com.cn, is offering downloads of the Femoo software for both mobile phones and PCs.

 

According to the website, a Femoo user will be charged 5 yuan (62 US cents) per month.

 

China Mobile has previously signed contracts with wireless service providers (SPs) including Tencent, Sina Corp and Tom Online, enabling the firm to provide various IM services on mobile phones.

 

But China Mobile said late last month it would not add any new IM services provided by SPs to its mobile Internet networks from June 1.

 

The China Mobile spokesman said that after December 31 it would end its partnerships with all SPs providing the IM services.

 

The Internet-mobile crossover business will build on the runaway success of short messaging service (SMS) and IM in China.

 

In the first quarter of this year, 98.8 billion SMS messages were sent in China, up 47 percent year on year.

 

The number of IM users in the country reached 93 million last year and is forecast to hit 120 million this year, according to Shanghai-based iResearch Consulting Group.

 

Wang Guoping, an analyst with China Galaxy Securities, said the launch of Femoo will put China Mobile in a position to compete head-to-head with SPs, especially Tencent.

 

"China Mobile has a very well-established monopoly in the wireless sector," he said.

 

"With the launch of Femoo, it will snatch up a big number of mobile phone-based IM subscribers."

 

Many IM platforms are integrated with various other functions such as file-sharing, music downloads and SNS (social networking service), which help IM providers generate additional revenue.

 

The SNS tool helps subscribers to establish new connections and enhance existing friendships.

 

Tencent controls about 70 percent of China's IM market and most QQ subscribers are young people.

 

Hong Kong-listed Tencent's revenue in the first quarter of this year increased by 115 percent year-on-year to reach 645.3 million yuan (US$80 million).

 

Its revenue generated from the mobile and telecoms value-added services accounted for 25.3 percent of the total.

 

The figure could decrease after the suspension of the partnership between Tencent and China Mobile, analysts said.

 

Currently Tencent charges its users 5 yuan to 8 yuan (62 US cents to US$1) for using QQ on mobile phones.

 

The impact of Femoo on MSN messenger could be minimal as MSN messenger is used mainly by office workers in China, and they are more loyal, Wang said.

 

Li Jiayan, an analyst with Beijing-based Analysys International, said China Mobile still faces a tough job to help users get used to a new IM tool despite its monopoly.

 

"It's better for China Mobile to co-market Femoo partnering with SPs," Li said.

 

(China Daily June 16, 2006)