Tencent ups the ante with mobile Internet call app

Shenzhen-based Internet giant Tencent Holdings Ltd on Tuesday fired a fresh salvo against leading telecom operators with its Internet calling app for mobile gadgets.

The app, WeChat phone book, allows users to make free calls using wireless networks or telecom operators' networks, send voice mails, use its phone book and even make high-definition quality voice calls. The so-called free calls can be made as long as the user links his phone number to his WeChat account.

Although Tencent tried to maintain a low profile and hardly gave the new app any publicity, its ploy of releasing it on Singles' Day, when most people are obsessed with online shopping, seems to have paid off. Due to the large number of users of the new app, the service remained unavailable on Wednesday morning and it was forced to update users frequently on when services would be restored.

Such a customer frenzy, however, is not a new experience for Tencent as the number of active users of its services on a monthly basis surged to 438 million by the end of the second quarter of this year. But the new app's performance on the second day shows that it is still quite unstable and provides less－than-satisfactory user experiences, said Wang Ningyuan, information technology industry researcher at the Shenzhen-based CIC Industry Research Center.

Zhang Yunqian, an administrative director at a multinational manufacturing company based in Shanghai, said the first impression about the app was not that good as Tencent was not prepared for the load and the large number of bugs that emerged. But she said she was not averse to trying the app as it would be a good choice for free conference calls.

Even though Tencent said that the WeChat phone book will allow users to make free calls, there will still be charges for wireless network or the use of telecom operators' networks. The charge will be between 0.03 yuan (0.0049 cents) to 0.15 yuan.

Industry experts also expressed concerns that Tencent's free app would affect China Mobile Ltd, China United Telecommunications Corp Ltd and China Telecommunications Corp, the top three telecom operators.

"In terms of convenience, charges and number of users, the new app is still nothing compared with the facilities offered by the three telecom operators. But it has upped the ante for operators to improve their services and lower charges," said Wang from CIC Industry Research Center.

Jiang Jianlin, a senior market analyst at the global market intelligence firm IDC China, said that the new app is a Tencent ploy to defend its turf in instant messaging and social apps. But there are also two factors that companies need to be aware of.

"The first is whether the service is legal and has got the necessary approvals. The industry regulator had refused permission for such services some time back and it is still not clear whether the same has been permitted now. The other question that comes to the mind is whether Chinese users, or the market, are willing to use such services instead of normal calls. What the market needs is not clear," said Jiang.