Kakao the invincible under threat

The most popular mobile messenger service in the country, Kakao Talk, recently put the IT industry on alert by announcing that it has 42 million subscribers. It has become a must have application for smartphone users here, as a survey showed seven out of 10 people said they wouldn’t buy a smartphone unless it supported Kakao Talk.

Its growth is bitter for many, especially mobile carriers that regard the service as free riding on their networks and eating into profits from text message services. It seems mobile messenger services will ultimately substitute text messages and now, mobile carriers as well as handset manufacturers, portals and application developers are preparing a counter attack.

Kakao Talk is the “mobile messenger of everyone” here. Most of the subscribers, or over 33 million, are Koreans, followed by users in Japan and the United States. Since its launch in 2010 March, Kakao has marked explosive growth amid penetration of smart devices. The industry estimates that subscribers could reach around 80 million by the end of this year.

Kakao Talk users exchange 2.6 billion messages a day, which means 56 billion won worth of text messages, a good income source for mobile carriers, is lost.

Other mobile messenger services have also been expanding though they lag far behind in terms of numbers. Tic Toc has managed to attract 13 million users in seven months since launching thanks to a competitive edge in speed, and Nateon UC by SK Communications, which operates Cyworld, secured 12 million users by linking with its Cyworld Minihompy service. My People, a mobile messenger service by Daum, one of the country’s leading portals, has also been receiving a favorable reaction by providing free voice calls. The country’s top portal Naver has seen its messenger service Line record 20 million downloads in eight months since launching.

Though reluctantly, carriers have launched messenger applications in response, including KT’s Olleh Talk and “Wagle” from LG Uplus. These have, however, failed to draw considerable numbers of people.

Unable to avoid dealing with Kakao, SK Telecom, KT and LG Uplus began to take bolder steps. They announced plans to develop Joyn, an integrated mobile messenger service through which subscribers of the three mobile carriers, which means all mobile users here, will be able to exchange text messages. The service is to be global as major mobile carriers overseas will also participate in the service. They expect it to have a competitive edge over other message services as it is likely to be loaded on the handset as default.

Manufacturers are also launching mobile messengers such as Samsung’s Chat On or and LG Electronics’ Link Social.

“The first-comer advantage is the most crucial in this kind of service. When all your friends are using Kakao Talk, you have no option but to join them,” an industry analyst said. But he added that mobile carriers can expect to increase users as their platform is to be preloaded on the handset.

Mobile messengers, even Kakao, haven’t set up good profit model yet except for advertisements. In the smart era, messenger services are something no industry player can ignore. Right now, just being in the game matters the most and profit models can be set later. <Korea Times/Yoon Ja-young>

news@theasian.asia