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StarHub partners WeChat, taking on SingTel-WhatsApp hookup

Singapore's no. 2 telco will offer an "unlimited" WeChat bundle for prepaid customers, going up against market leader SingTel in the OTT space which has a similar plan with messenging platform WhatsApp.
Written by Ryan Huang, Contributor on

Singapore's two largest telcos are now slugging it out in the OTT messenging space, through their respective partnerships with third party apps.

In April, LINE told ZDNet it would work actively with local "telcos" but did not reveal who it would be partnering.

The second largest carrier, StarHub, announced on Tuesday its tie-up with China's WeChat. It will offer prepaid customers virtually unlimited use of the app for S$0.40 (US$0.32) a day or S$6 (US$4.80) per month. This is similar to the deal announced in August by rival SingTel, which offered WhatsApp services at S$0.50 (US$0.40) a day or S$6 (US$4.80) per month. Data usage has been capped at 1GB a day by both telcos.
The telcos' tie-up with OTT messenging platforms looks to be an effort to attract and retain customers while they work on bringing their own services to market. In February, both telcos announced plans to take on over-the-top (OTT) messaging apps with their own platforms. However, SingTel's recent efforts with an "all-in-one communications app", LoopMe, suffered a setback when it ran into legal complications earlier this year, but the telco has insisted it's still determined to work on an alternative.

Interestingly, Singapore's third and smallest operator M1 has yet to make any significant moves in the OTT space. So far, M1 has only revealed its intention to "refocus on deriving revenue from traditional telecommunications or data connections, rather than go with the tide in developing content", according to a Today report. If M1 decides to jump on the bandwagon, there are still potential partners in the increasingly saturated market of OTT apps including LINE, Nimbuzz, and KakaoTalk.

The rise of OTT players has been slowly eroding the profit margins of telcos, with its substitution of SMS and traditional voice calls with instant messaging and voice over Internet protocol (VoIP). The messenging apps addons such as animated stickers, recorded voice messages and group walkie-talkie or text chats. The impact by OTT apps is largely responsible for global annual SMS revenue dipping by US$23 billion to US$96.7 billion by 2018, with the Asia-Pacific region experiencing the highest drop, according to a study by Informa.
China Mobile, the world's largest telco, has responded to the challenge with the launch of Skype competitor Jego on Tuesday. The app allows anyone outside China to receive free incoming calls over a data connection via an Android or iOS smartphone.

WeChat gaining global traction in crowded market

The Chinese messenging platform owned by Tencent currently has 270 million monthly active users, which includes 100 million from out of China, according to a report by 36kr. WeChat was launched in January 2011 and  currently adds 8,000 members daily, 36kr added.

That's still behind market leader WhatsApp currently has over 350 million monthly active users as of October, up by 50 million from August, according to the Verge. LINE has also been gaining ground boasting some 260 million users since its launch two years ago, signing up more than half of them this year, noted the Guardian last month. KakaoTalk has over 110 million users with 40 percent of them based outside its home country South Korea, according to Financial Times.

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