China Mobile wants to use Counterfeits to counterattack

Recently, a suspected outflow of PPT about China Mobile’s reconstruction of the flying letter business has caused concern.

In the report, China Mobile pointed out that as the largest Internet product for China’s mobile users, Fetion has a lot of similarities with the OTT business in terms of product form. In the future, it should be reconstructed by Fetion and it will be evolved into future converged communications. The core of the product.

“The rise of WeChat means that instant messaging and SMS revenues for operators will quickly decline. Operators can only rely on the incremental traffic generated by WeChat to compensate for the decline in SMS revenue, but this is obviously not enough to make up. The increase is far less than the loss.” Yiyi Consulting CEO Zhang Yi told the “First Financial Daily” that China Mobile must have its own products, and as a basis for flying letters that have invested billions of yuan for it.

"The number of basic users of China Mobile is actually very destructive. Now it is either WeChat or Momo. The biggest problem for users is the traffic problem. Users like to use this product, but if the traffic is excessive, it will be A big problem is that if China Mobile can give users some discounts or incentives in terms of traffic, users are willing to use them. If they are bundled with smart machine manufacturers, sales of smart machines are not a bad thing, Zhang Yi pointed out.

For Fetion, the change in attitude of China Mobile is obviously good news. The flying letter business has always been the main part of China Taiyue's income, and the gross profit margin level is relatively high. Starting from 2009, the proportion of the flying letter business income has been declining year by year. According to the reporters, China Taiyue's revenue in 2010 was 840 million yuan, and Fetion’s revenue was 490 million yuan, accounting for 58%. By 2011, the proportion had dropped to 52%, and by the end of the first half of 2012, it had accounted for as low as 44%.

Guohai Securities analyst Ma Jinliang said that when the company was initially responsible for the development and operation of Fetion services, it fully benefited from the high growth of the number of Fetion active users, and the market also gave the company a higher valuation, but with a series of WeChat, meters chat, etc. With the advent of IM tools, the growth rate of Fetion subscribers has slowed down significantly. The market even once considered Fetion may be marginalized by China Mobile, leading to a rapid decline in the valuation of the company.

"The golden age of SMS is over, but what operators are now doing is how to deal with the problem of residual heat." Zhang Yi said that although the current integration of flying letters is not a step toward the end of SMS, operators are worried that traffic will run. External issues, but because of Fetion's user base and previous large-scale investment, China Mobile has become a matter of course.