South Korean telcos to shutter RCS Joyn

KT and LG Uplus announced that they will cease the rich communication service (RCS) program Joyn, with SK Telecom still to make a final decision.

South Korea's telecoms are abandoning even the pretence of competing against the country's dominant messaging app KakaoTalk.

Two of the three telecoms -- KT and LG Uplus -- confirmed media reports on Thursday that they will shutter their rich communication service (RCS) program Joyn in South Korea as early as Friday. SK Telecom, the country's largest wireless carrier, said it has yet to make a final decision on Joyn.

In a country of about 55 million, Kakao has over 40 million MAUs of its signature chat app, which is widely estimated to be downloaded on some 96 percent of all smartphones.

KT and LG Uplus will pack in Joyn in South Korea by Friday, but all three of the country's telcos, including SK Telecom, stopped adding new subscribers in December last year.

For its part, SK Telecom does not have plans to shut the service down on Friday as long as it still has subscribers, but a spokesperson did say: "Since Joyn service interworks with other operators and KT and LG Uplus are closing down the service as planned, SK Telecom will figure out what to do in the future as well."

All three telecoms had signed up for the global industry-wide RCS in December 2012 in reaction to the rising popularity of over the top (OTT) messenger app KakaoTalk in the country, but the move was too little too late.

Despite an attractive feature set and initial industry buzz, RCS failed to make the impact that many had expected. Joyn simply could not compete against messenger brand names such as Whatsapp, WeChat, Line, and KakaoTalk.

Chat app graveyard

Joyn is the latest addition to the chat app graveyard in South Korea, which includes SK Communication's NateOn, KT's OllehTalk, LG Uplus' Wagle, and even Samsung Electronics' ChatOn.

Joyn's main advantage was also its weakness. Sure, interoperability was attractive. It offered a single messenger service for dozens of telecommunications operators around multiple networks and devices around the world. But that made it slow to adapt to a fast-changing tech landscape. As a messaging standard controlled by an industry organisation that has to work with companies based in over 200 countries around the world, Joyn was a dinosaur compared with leaner, privately owned OTT rivals.

OTT chat apps like Line and WeChat with a leaner business profile are faster. Kakao proved that in South Korea.

RCS was developed in 2007 as a possible successor to SMS messaging and the GSMA -- the global association of telecommunications service operators -- gave its official backing a year later. At its core, Joyn offers a range of advanced messaging features including group messaging, voice and video calls, file transfers, and a host of other features. But that was not enough in South Korea.

Kakao's network effect

Most people use a chat app to communicate with their friends, but a messaging app gets popular only if it is already popular. This Catch-22 is difficult to crack, and harder still for a new entrant into a market already dominated by one operator.

Kakao can maintain its stranglehold in South Korea due to this network effect. The company has a significant 73 percent market share, according to a report by global research consultancy TNS, which quizzed over 60,000 internet users in 50 countries around the world, in a report called "Connected Life 2015".

The parent company is also targeting expanded business in games and apps, and thanks to the popularity of KakaoTalk has transacted $4.18 billion over its securities app since its launch in 2014.

Broadly speaking, the market for instant messaging is fragmented by region and country. No single instant messaging service can dominate globally. The industry's biggest players WeChat, WhatsApp, and Facebook Messenger are carving slivers of worldwide market share with 29 percent, 17 percent, and 15 percent, respectively.

But by country, the winners and losers were clearly defined, according to TNS. Line has Japan, as well as a big share in other countries. In China, WeChat dominated with 69 percent of the market; in Hong Kong and Singapore, it's WhatsApp with 81 and 79 percent, respectively.

RCS was designed as an evolution of SMS. What's next is now up for speculation. The decision by SK Telecom, LG Uplus, and KT could single an approach by other Asian telecommunications operators in the months to come.



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