Shall Tencent charge for downloading “WeChat”?

Tencent company is the biggest internet company in China. In 2010, Tencent released an instant chatting software for the smartphone system which is called WeChat. Much like the  WhatsApp and iMessage, these are all free downloading software. But Tencent Company has announced a news that they will charge for the WeChat downloading. 

WeChat is unlike Skype, is more flexible, users just need to pay for it when they make a phone call. The Skype Company is like a role of virtual operators. Users pay for it directly through Skype company instead of through telecom Companies. Undoubtedly all companies want to maximize their profit margin. In March 2010, Verizon released Skype Internet phone and data plan, then users were able to use Skype directly. So, Tencent also want WeChat to corporate with China Mobile Telecom Company.  On March 11of this year, Tencent held (0700. HK) shares and each share reached $286 Hong Kong dollars, the highest ever. According to Tencent’s report, they still maintained growth in March. In 2012, the revenue of Tencent is 43.894 billion RMB; with a yearly growth of 54%, and the net profit is 12.332 billion RMB, with a yearly growth of 24.8%. When three big Telecom companies of China, China Mobile, China Unicom, and China Telecom have announced that WeChat will close their free version to customers, Tencent stock began to go down.  

With the Tencent's stock price dropping and the announcement of WeChat charging, these probably will become investors' biggest worry. But other services of Tencent Company are keeping good growth, such as QQ and games. Although there are some signs showing their profit channel is going down, the CEO of Tencent, Zhang Yi thought they still have to focus on the the WeChat, because people can not use Facebook in China, so WeChat will become Chinese Facebook. Many people think that if they charge for downloading customers probably will no longer use it. The fate of the WeChat directly affects the destiny of Tencent Company’s next step. 

Reference:

http://www.techweb.com.cn/it/2013-04-09/1288167.shtml

http://tech.ifeng.com/internet/detail_2013_04/09/23997551_0.shtml?_114sotuwen