BUSINESS

Will KakaoTalk kill off text messaging services?

By Yeo Jun-suk
  • Published : Sept 26, 2019 - 18:14
  • Updated : Sept 26, 2019 - 18:14

Despite South Korean mobile carriers’ efforts to rekindle the use of text messages, the prospects of the once-lucrative business continue to look grim.

The country’s three biggest telecom firms -- SK Telecom, KT and LG Uplus -- have upgraded their text message services with advanced features like group chatting and video sharing in recent years.

But the moves have so far failed to draw users away from the popular messenger service KakaoTalk. While the chatting app has seen a dramatic increase in its users since its launch in 2010, the number of those using text messaging services has declined constantly.

According to Kakao, the number of monthly active users for KakaoTalk was about 44 million as of last month -- an increase of about 10 million from the same period a year earlier. This indicates that almost every person living in Korea relies on the service for daily communication.

Meanwhile, mobile carriers have continued to suffer from a decline in the use of text messaging services. According to the Ministry of Science and ICT, the number of text messages sent last year was about 30.6 billion -- 4.3 percent down from a year earlier and 13 percent down from 2015.

“In the era of smartphones, mobile carriers’ text messages have lost competitiveness to KakaoTalk and other mobile messenger platforms,” Rep. Roh Woon-rae of the ruling Democratic Party, who obtained the ministry’s data, said Thursday. 


A smartphone user uses the KakaoTalk chatting app. Kakao


Text messaging services had been a primary source of income for mobile carriers before smartphones and the hyper internet advanced, as their subscribers mostly used voice calls and text messages to communicate.

A single phone call and a single text message was charged each time. While the price varied depending on the service type, millions of subscribers paid between 10 to 100 won (8 cents) for a single text message.

However, telecom firms’ most lucrative business began to face challenges after the emergence of smartphones and the hyperspeed internet. Instead of using short message services or multimedia messaging services from the mobile carriers, users flocked to KakaoTalk and other mobile chatting apps.

Now, the telecom companies no longer establish their price plans based on the number of text messages being sent. Subscribers instead can choose data-based price plans, which charge mobile fees based on the amount of data being used for smartphone functions.

“When we advertise our price plans for consumers, text message fees are no longer an important selling point,” said an official from one of the country’s mobile carriers. “Frankly, we don’t pay as much attention to text message profit as we used to in the past.”

Given the change in the business landscape, the telecom companies have been introducing upgraded text messaging services to compete against messenger apps.

Among the latest efforts is Chatting Plus, a text messaging service through which subscribers can send massive videos and conduct simultaneous chatting. Up to 100 people can engage in a group conversation, and subscribers can exchange files of up to 100 megabytes.

Based on technology called Rich Communications Services, subscribers can use such services regardless of which carrier they subscribe to. SK Telecom, KT and LG Uplus began the service last month.

“As long as the users upgrade their smartphone messaging software, they can enjoy the service,” the mobile carriers said in a joint press release last month. “Every subscriber can experience better messaging services across the boundaries of telecom firms.”

However, there remain limitations for the mobile carriers in reviving the popularity of text services.

Chatting Plus is limited to Android-based smartphones, such as the latest version of Samsung’s Galaxy series. Models released before the Samsung Galaxy S8 and Note 8 are restricted from using the full service. The same goes for Apple’s iPhones. Furthermore, Chatting Plus will become a paid service next year.

“When all of your friends are using KakaoTalk, it would be difficult for you to become the only person using a different communication app,” said an industry source.

(jasonyeo@heraldcorp.com)



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