China Mobile to roll out UC service by the end of this year

China Mobile, the country's largest telecom carrier by subscribers, is planning to roll out a unified communication (UC) service, domestic news portal tech.qq.com reported Monday, which analysts said is a move by the company to find a new profitable alternative to replace its shrinking short message service (SMS) business.

UC refers to the integration of real-time communication services such as instant messaging, video conferencing, and data sharing with non-real-time services like traditional SMS and voice messages.

According to the media report, China Mobile's UC service will allow phone users to send SMSs by using mobile traffic data instead of paying 0.1 yuan ($0.016) each as they do now.

The new service is expected to officially go online by the end of the year, aiming to attract 20 million users at the preliminary phase, and the commercial adoption may be fully realized by the end of 2015, said the report.

It is a wise step for China Mobile to take, as its SMS business has been weakened amid the rise of popular online instant messaging (IM) apps such as WeChat, Xiang Ligang, CEO of industry information portal cctime.com, told the Global Times Monday.

The growing use of mobile Internet has made Chinese consumers increasingly send instant messages and voice mails via mobile apps using mobile Internet, signifying a gloomy outlook for traditional SMS and voice messaging.

Tencent's latest quarter fiscal disclosure showed that WeChat hit 438 million monthly active users at the end of the second quarter of 2014, mostly domestic users.

During the first three quarters of the year, China Mobile's total voice messaging usage dropped 0.3 percent year-on-year while SMS usage slumped 20.2 percent, according to a quarterly performance report filed in late October.

Xiang believes that UC service is a good replacement for SMS and even voice business, predicting that China Unicom and China Telecom would likely follow China Mobile's move.

According to tech.qq.com, China Mobile's UC service cannot be used by subscribers of China Telecom and China Unicom, which experts said may block its rapid development, as IM apps offered by Internet companies have not set similar restrictions.

According to a China Mobile interim report issued in August, the Hong Kong-listed telecom giant is undergoing a strategic migration of its core revenue source from voice to data traffic.

The company said in the report that it had been continuously promoting the development of new business as well as major drivers such as data traffic amid the saturated traditional communications market and aggressive OTT (over-the-top) products.

OTT refers to the delivery of audio, video and other content over the Internet.

Currently, the UC service offered by China Mobile only allows the integration of SMS with real-time communication, but voice messages will also be integrated into the new service later, according to media reports.