Broadband

The pretenders to mighty MXit’s throne

Vodacom and MTN scrambled late last year to rush alternatives to market. Nothing’s working yet…

The runaway success story of mobile instant messaging (IM) service MXit has consistently captured the media's attention over the past few years. We can estimate that MXit currently has over 6m registered users (it reported 5,7m in November) and one of the company's aims is to reach 50m registered users by the end of this year. It's a tall order, but with the might of Naspers (a 30% shareholder) behind it, and having launched versions in the UK, Brazil, France, Germany, Italy, Portugal, Spain, Indonesia and India, the social network might just pull it off.

But, here at home, the networks are jealous. They'll never admit it though.

Over 90% of MXit's current users are from SA. MXit's total user base sends a staggering 200m messages per day. Assuming (and it must be stressed these are very rough calculations for the purposes of illustration only) an average message on MXit equals 20 bytes (a 160 character SMS is 140 bytes). That means that roughly 40GB (4bn bytes) of MXit traffic is making its way across the networks every day. At a retail price of R2 per MB, this means revenue of over R750 000 per day (this is still part of that rough calculation).

It's no secret that for cellphone networks, data is a high margin business, so it's understandable they want in on the action.

In the space of a few days late last year, we were bombarded with three product announcements from Vodacom and MTN.

Vodacom is hedging its bets with meep available on http://www.mymeep.co.za/ (lesson one in naming a product: check that the url is not taken - meep.co.za redirects to an insurance website). Meep is a real-time (duh) instant messaging service. On the plus-side, because this is a network initiated product, using meep on your phone attracts "no additional charges ... for data-usage". Rather, users buy meepots (the somewhat bizarrely named parallel currency). It's obvious why Vodacom has chosen to make this split: data traffic on its IM service will be priced differently to the normal price of R2/MB on its network (we'll know the exact costs when the service ceases to be free at the end of this month). The parallel "currency" also allows Vodacom to tweak its price points continuously. However, the meep client (software) only works on 17 phone models. If you don't have a top of the range Sony Ericsson or Nokia, you're left to use the WAP site version.

TheGRID (http://onthegrid.mobi/) is Vodacom's second bet in this space. This holds a lot more promise as it is a location-based, mobile social networking service. Basically it figures out where you are, spits that information out and shows your position on a map (together with that of your signed-in friends). Users on TheGRID can leave random posts (text messages, photos, video clips) around the city (something which Vodacom bizarrely refers to as "blogs"). It's an interesting idea, but needs to achieve critical mass before these posts of shared information become useful to anyone.

Also, there has been a lot of toing-and-froing on the development of TheGRID... it's unclear whether Vodacom has a clear product roadmap or an idea of what it wants this to be.

MTN's noknok is an also-ran IM service (most likely a white-labelled piece of third party software). It can be downloaded to a phone or PC (or both). The PC-based software is a novel option but surely instant messaging on a mobile phone is the point?

The Holy Grail is interoperability. If Vodacom and MTN (even tough the companies loathe each other) could achieve some sort of interconnectivity between all three of these services, they might just have a chance at taking market share (and clear profits from data) away from MXit. The main challenge is that these network offerings need the users to start switching, so that others will. With very few users, there's no reason anyone will switch.

The dark horse is mig33, an upstart founded in Australia by Steven Goh and Mei Lin Ng. The two sat down with a piece of paper and a goal to figure out a way for teens to send text messages as much as they wanted. Ideas followed by a business proposal led to mig33. Growth was rapid and mig33 is now based in Silicon Valley in the US.

The program which you download on your phone (or WAP service or website) allows you to chat to friends on the AIM, MSN and Yahoo IM services. Mig33's bonus is that in integrates VoIP calls, instant messaging, text messaging, social networking and community features in one service. The VoIP ability built into mig33 should have networks around the world scratching their heads.

About a quarter of Mig33's global subscriber base lives in SA: over 2m users, so this is a big market for them. One could safely assume that most of these users overlap with MXit's base.

And it wants more. Just last week, mig33 announced it had obtained a distribution licence in South Africa with the assistance of the DNR Group. "The company's first partnership in South Africa enables mig33 to offer prepaid services at more than 1 000 retail locations to ... people already using mig33 across the country. The company is actively working to expand its presence in the area and hopes to announce similar partnerships in the coming months."

Goh maintains that while developed markets such as the UK and US are "very important for us ... relatively smaller markets like South Africa are often overlooked and are hungry for attention. These areas can drive a lot of data revenue for a company willing to take the time to attend to them".

Will Mig33 overtake the mighty MXit? Not likely.

Will the two find a way to work together? Most probably.

Print story    Email story

COMMENTS