China Telecom moves into social messaging

China Telecom has teamed up with Netease to launch a new social instant messaging (IM) service that will take on WeChat, the popular and disruptive IM app from Tencent.
The companies announced Monday that they have formed a joint venture and unveiled "YiChat", a social IM application for smartphones.
Netease is an internet portal and game operator in China operating online games, email services, advertising services and web portals in the country.
YiChat users can send free text and voice messages to any mobile phone or free voice messages to fixed lines, without the need for YiChat to be installed on the receiving devices. It also offers features including environmental noise reduction technology. China Telecom customers who use YiChat can also enjoy additional free data promotional packages, the companies said.
"The joint venture with NetEase and the launch of YiChat is a crucial step in China Telecom's strategic transformation," said Jie Yang, president and COO o China Telecom, adding that the operator aims to make YiChat a top messaging app for young people in China.
"Our strategic joint venture with China Telecom aims to provide a superior social instant messaging application for smart phone users," said William Ding, CEO and founder of NetEase. "This partnership signals the start of NetEase's entry into the mobile instant messaging space, and is the one of the key components of our mobile internet strategy.”
The partnership is an attempt by China Telecom and Netease to compete against the popular WeChat service, which has now 300 million users in China and 100 million customers in overseas markets.
It also marks the latest tie-up between a Chinese telco and internet player. China Unicom launched last month a WeChat Wo card customized for Tencent’s popular WeChat service, acting under the philosophy that if you can't beat them, join them.
So far only China Mobile, the world’s largest mobile carrier by subscribers, hasn’t formed any partnership with OTT players. But China Mobile earlier gave out $81.3 million contracts to two Chinese IT companies to revamp its Fetion mobile IM business, as part of the operator’s strategy to take on WeChat.