Popularity of free mobile messenger apps hits standard texting services hard
Lee Sung-ha, a 31-year-old office worker, has sent far fewer text messages since he started using mobile messenger services such as Kakao Talk and more recently Apple’s iMessage.
Under his payment plan, he is allowed to send 300 messages every month without charge. But he said he now sends fewer than 30.
“My voice minutes also slipped in recent months. I feel I’m wasting money on a useless service,” he said. “Even some people I meet for business purposes say they are more comfortable communicating with me via Kakao Talk.”
Since the huge success of Kakao Talk, the nation’s No. 1 mobile app, there has been a proliferation of mobile messenger services that allow users to text for free.
Rather than relying on revenue from standard mobile services, a growing number of businesses are eying the money-making potential of data-based text services.
A user texts on his iPhone using Kakao Talk, the nation’s No. 1 mobile messenger app. (Park Hyun-koo/The Korea Herald)
The unbeatable Kakao TalkAccording to the venture firm Kakao, the number of Kakao Talk subscribers surged to 42 million as of March, a fivefold increase from a year earlier.
The number of messages sent daily was 2.6 billion, which would have brought in telecom carriers some 52 billion won ($46 million).
The average number of daily visitors, which the company says is the most meaningful data in the industry, also exceeded the 20 million mark this month.
Industry sources say that smartphone users use two mobile messenger services on average these days, one of them being Kakao Talk.
Research in Motion also launched Kakao Talk services exclusively designed to run on its BlackBerry handsets in March even though it has its own service called BlackBerry Messenger.
Globally, there are some 8 million Kakao Talk users in 200 countries outside Korea. The company operates a Japanese branch, while the number of Chinese subscribers hit 5,000 just in one year.
“We have continued to grow thanks to the simplicity and convenience of our services,” said a Kakao spokesperson.
In order to prevent excessive data traffic within the current service, the company has developed separate apps for those who want additional features like photo albums.
Other tech companies are jumping into the market but have yet to achieve similar success to Kakao Talk.
My People of Daum Communications and Tic Toc of Madsmart have secured 17 million and 13 million subscribers, respectively. Line of leading portal Naver also saw more than 20 million downloads since its launch last March.
Handset makers have also launched their own messenger services, such as Samsung’s Chat On and LG’s Link Social though the early reaction is slow.
Telecom carriers fighting backThe surging popularity of free-texting services and their business impact, especially on the telecom industry, is not an issue limited to Korea.
During their annual gathering at the Mobile World Congress in February, global telecom operators agreed to launch a unified mobile messenger service within the year under the brand name “Joyn.”
And Korean players seem faster in adopting the new initiative as they plan to launch the Korean service as early as July.
Considering that a mobile messenger is all about the number of users, the new plan, involving the nation’s three telecom carriers SK Telecom, KT Corp. and LG Uplus, covers all cell phone users in Korea.
The integrated service supports sharing of multimedia files during voice calls and individual and group chatting.
Among other things, the new service would be embedded into handsets launched from July so that the users do not need to download an app or wait for the loading to start.
“In the near future, the mobile messenger could be included into the main menu of a cell phone screen together with voice call and Web searching buttons,” said a KT official.
“We will be able to offer global communications services soon after the nation-level service is completed. Other countries are carefully watching moves by Korean companies.”
Service fees are another key issue.
The official hinted that chatting would be offered free of charge but other data services like sharing videos and photos would be charged.
But Kakao appears unperturbed.
“At this time when we are seeking ways to diversify profit channels, we welcome more competitors are joining the market. That indicates that the mobile messenger service has become a new platform in the industry,” said a Kakao spokesperson.
The official declined to comment on whether the company was noticing a business impact from the integrated service of telecom carriers.
Extinction of standard texting?Industry watchers say that SMS revenue could fall by 20 to 30 percent in Korea in the coming years, advising companies to be ready for the coming shift to data use.
A recent report by research firm Ovum also estimated that there would be further losses in SMS profits if the legacy services don’t start investing in bringing new and improved services to the table.
“Tapping into the creativity of app developers, forming industry-wide collaborations, and leveraging their usage data and strong relationships with subscribers are the key ways for operators to ensure that they hold their ground in the messaging market,” the report said.
However, companies are expected to use apps alongside traditional texting for some time, as they claim that more than 75 percent of the world’s mobile customers still use it.
“Standard texting never fails to deliver a message, which is an important feature for those who are concerned about security and privacy issues,” the KT official said.
“Considering important conversations are still carried out via regular texting, we believe its premium role could be maintained in the future.”
By Lee Ji-yoon (jylee@heraldcorp.com)