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Telcos take the battle to WhatsApp

SINGAPORE — The sharp drop in the number of text messages exchanged in the past two years has made telcos here sit up, with plans drawn up to regain lost ground by developing their own WhatsApp-like applications and partnering with app developers for another source of revenue.

SINGAPORE — The sharp drop in the number of text messages exchanged in the past two years has made telcos here sit up, with plans drawn up to regain lost ground by developing their own WhatsApp-like applications and partnering with app developers for another source of revenue.

Latest Infocomm Development Authority statistics showed the volume of SMSes sent fell to 1.78 billion in December from 2.3 billion a year ago — a 22-per-cent decrease. In December 2010, 2.4 billion SMSes were exchanged by mobile phone users.

SingTel and StarHub are going head-on against popular messaging apps such as WhatsApp and Viber — largely believed to be responsible for the decline in SMSes — by developing their own platforms which they say will provide more value than WhatsApp, for instance.

Those in the telco industry also believe there is potential for a new revenue model: App developers or even retail service providers could pay telcos to offer users free mobile data to access their apps.

StarHub, for example, is working with its alliance partner Vodafone to launch a new, interoperable service in the second half of this year. Using just one platform, users can make video calls, share photos or music on one single platform, without the need to download different applications.

Mr Chan Kin Hung, Senior Vice- President of Personal Solutions at StarHub, outlined the possibilities: “Imagine instant messaging, making voice calls over IP (Internet Protocol), file sharing and much more with anyone in your mobile address book without the need to download different mobile apps or create multiple login accounts.”

Such a service, dubbed Rich Communications Services, has gained traction in Europe, he said, adding that while text messages have decreased, not everyone installs the various apps on their smartphones. The Short Message Service, developed two decades ago, is still the most common form of text communication as there is no need for parties to download an app to make it work.

Hence, he felt that there is a need to “explore innovative ways to close the gap between over-the-top (OTT) services and SMS” so as to develop a ubiquitous communication platform — with multiple functions — that everyone can use.

SingTel is also looking to launch its own apps in the coming months, as it seeks to “shape the app market”. “This requires a total strategy in terms of apps and content, handsets, network enhancements, price plans and customer experience,” Mr Johan Buse, SingTel’s Vice-President of Consumer Marketing, said.

But the smallest telco, M1, is taking a step back to re-focus on deriving revenue from traditional telecommunications or data connections, rather than go with the tide in developing content.

A spokesman said: “Rather than telcos developing their own Internet-based messaging apps to compete, we believe app developers and owners will work with the telcos in future to ensure that their users have access to their applications in an efficient and affordable manner.”

Consumers need not mourn the death of the SMS just yet. Telcos believe that there will always be a place for text messages, especially in the business sector due to the higher level of security. According to SingTel, the number of text messages sent by businesses have jumped two-fold each year.

Analysts believe that traditional data revenue will no longer be enough to sustain telcos in the future. Mr Adrian Dominic Ho, an analyst at research firm IDC, said that telcos should explore building their own application stores and create applications that can be used across all phone models.

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