What is OTT?
Over the top was originally a sports term, referring to a "lofted pass."
It refers to internet companies bypassing system operators to develop various video and data services based on the open internet, with WeChat being a typical OTT application.
If WeChat wants to develop voice and video calls, it cannot bypass the three major operators.
As operators, they can accept WeChat sending messages or even 60-second voice messages, but they absolutely cannot accept calls.
This is encroaching on the three major operators' territory.
Chen Pingjiang could, of course, force the issue and then negotiate with the three major operators when they realize something is amiss.
But Chen Pingjiang wanted to prepare in advance to eliminate potential risks.
There are both paid and free OTT services around the world, and even the same OTT software faces paid and free options in different countries.
Chen Pingjiang clearly could not accept operators charging him.
Although WeChat also has fees for official account and mini-program certifications, or some Moments advertising fees, these are a drop in the ocean compared to the massive investment.
WeChat will only be an ecosystem, like a stage, inherently difficult to profit from, and can only be used to boost Renren.com's market value.
If this were the case, paying exorbitant network fees to the three major operators annually would not be conducive to WeChat's operation and promotion at all.
Li Xi, as CEO of Renren.com, had also arrived in BJ.
"This conversation is just to give them a heads-up, to tell them this is happening. In reality, whether they agree or not, we will launch video and voice calls. A living person can't be held back by having to pee,"
Chen Pingjiang said to Li Xi.
"If it's in a written document, then there's nothing to fear, right?"
"Hard to say. Even if they agree now, they might turn hostile after a year or two when WeChat truly impacts their interests, especially since even simple number portability is impossible."
Chen Pingjiang would naturally not be so foolish as to walk into the gun barrel himself and tell the three major operators,
"Don't charge me money."
Negotiations require strategy.
When they arrived at the hotel where the meeting was being held, representatives from the three major operators were already there, all vice presidents in charge of specific businesses.
Actually, this was good, at least what he said could be understood by the other party.
Chen Pingjiang merely explained WeChat's needs, but unexpectedly met with strong opposition.
The vice president of Mobile was recently depressed that his Fetion was declining.
"Mr. Chen, are you kidding? If you take over the calling business, what will be left for us operators to do? How will we compensate for the huge revenue reduction this causes? Will we charge you? Currently, voice calls account for the largest share of our overall revenue. If our core business is damaged, we won't even have the funds to deploy 3G networks."
Unicom also frowned:
"We didn't feel it deeply before, but once users reach a certain scale, it's already burdening our network, and that's without voice calls. If we add voice and video calls, I can't imagine."
"Frequent signaling and connection resets consume a large amount of signaling resources, and every friend's dynamic update and group message consumes even more network resources."
In response, Chen Pingjiang could only shrug awkwardly.
WeChat can only be "always online," otherwise it won't receive messages.
But as long as it's online, it continuously sends "heartbeats" to the operator's network.
These "heartbeats" themselves carry no data traffic but occupy the operator's signaling channels.
If "heartbeats" are too frequent or too numerous, it can cause problems for the operator's network, or even cripple it.
"Mr. Chen, I hope you take this issue seriously. We spent hundreds of billions building mobile networks not just to serve WeChat. Last December, the operator O2 in the UK encountered this problem, where 8% of smartphone users generated 55% of the signaling traffic, causing some users in London to periodically be unable to make or receive calls."
Chen Pingjiang said with a smile:
"Mr. Liu, the dissatisfaction isn't actually because WeChat occupies channels, but because WeChat occupies signaling resources without bringing in corresponding mobile data traffic. In other words, WeChat currently occupies too many operator resources but doesn't generate matching traffic revenue, and it could also cripple the network. This is the direct cause of your dissatisfaction."
"I personally hope to achieve a win-win with all operator partners, just like our cooperation on contract phones."
At this point, Vice President Liu from Lenovo was somewhat displeased, thinking,
"Don't include me, I haven't cooperated with you on contract phones."
Chen Pingjiang continued:
"We should work together to make the pie bigger, and then charge users for data traffic fees, instead of trying to get another slice from basic communication services. OTT is a progress, a trend. The whole world is changing now.
Can we really try to stop a chariot with a praying mantis's arms just for our small personal interests? If so, we will become national sinners, standing against the people, and will inevitably be swept into the dustbin of history. No one can stop this force."
"Mr. Chen, let's just talk business. Don't label us. If this gets out, people will think we three major operators are villains. Let's talk business."
Before Chen Pingjiang could speak, someone opposite him eagerly interrupted.
You, Chen Pingjiang, are a master of public opinion; we are not.
What if these words are exposed on Weibo?
How are we supposed to live?
Chen Pingjiang laughed heartily:
"Alright, alright. Then let me put it another way. You operators might not like OTT, but the common people do, and they love using it. Even you yourselves use WeChat, right? Besides, the OTT issue isn't surfacing for the first time. Previously, P2P downloads consumed excessive bandwidth resources, and you simply banned them. But what did that achieve? Users voted with their feet and just switched operators."
"Some demands are essential for users. Simple bans won't achieve your goals; instead, they'll push users into others' arms. Without WeChat, there's Wechat, and do you believe that Pony Ma will come to talk to you about this in a while? Although WeChat diverts some SMS and voice services, it will also increase your data traffic revenue. With one coming in and one going out, perhaps you might even make a profit."
"We can discuss the signaling storm issue gradually, and I will also ask the technical department to make some adjustments. We will always find a good model for us to develop together; there's no need to be adversarial. When the 4G era arrives, perhaps the signaling problem will be solved?"
The vice president from Telecom nodded:
"Mr. Chen, to be honest, I also came up with some immature ideas before coming here. WeChat isn't the only one occupying signaling; there's also QQ, and other software will emerge in the future. Making all enterprises or users pay is indeed impractical. If, and I say if, we two sides can share resources or mutually recommend services, I think that would be excellent!"
As soon as he finished speaking, the vice presidents of Unicom and Mobile immediately glared at him, wishing they could devour this "traitor."
Well, we're still arguing here, and you just turned around and sold us out?
Telecom's vice president stated,
"I can't help it."
After all, Telecom only recently entered the mobile business and couldn't compare with the other two.
A set of numbers makes it clear.
Mobile has over 500 million mobile users, Unicom nearly 150 million, while Telecom only has a meager 70 million.
How else can we turn things around without finding another way?
As long as the numbers can grow and everyone gets a bit more year-end bonus, selling one's soul isn't out of the question.
Anyway, everyone is selling, it's just a matter of who sells more.
In an era where poverty is mocked but prostitution is not, none of this is an issue.
Besides, Telecom has fewer users, so the signaling storm it occupies is also limited.
The situation was very clear.
Mobile, with the highest market share, had the strongest stance; they even rejected WeChat and Weibo from the bottom of their hearts, as these were direct competitors to their own Fetion.
Unicom's Old Liu coughed:
"Actually, there isn't no solution. Mr. Chen, Renren.com, Weibo, and WeChat under your belt are all major traffic generators. Creating a dedicated zone for them wouldn't conflict with other users. I also hope you understand that charging for valuable resources, both domestically and internationally, is a reasonable demand.
Didn't France Telecom charge Google for occupying network traffic? Data channels are like building highways; construction and maintenance both require costs."
"Unlike Mobile, who has to protect their Fetion, we Unicom are simply discussing the matter at hand. On one hand, free WeChat is encroaching on SMS, and in the future, it will also encroach on the voice call market, which will definitely reduce our performance.
On the other hand, it consumes valuable and limited mobile communication resources without compensation. It's no exaggeration to say we are being attacked from all sides by OTT services."
Unicom's Old Liu's words were relatively objective, making him the most neutral among the three operators.
By the end of the discussion, it was no longer a matter of money.
Rather, after opening this floodgate, would Renren.com have to pay, would Weibo have to pay, and would the consumers ultimately pay or would someone else?
If only WeChat pays, then would QQ have to pay, and would emerging apps like DingTalk, Momo, and Tantan have to pay in the future?
Chen Pingjiang still insisted that users had already paid monthly fees and data fees, so they weren't paying nothing.
Why should there be a second charge?
To put it bluntly, WeChat still touched the three major operators' cheese!
If WeChat hadn't affected the three major operators' voice calls and SMS services, would they be clamoring for fees?
Free internet is the mainstream trend; charging fees is going against the current!
The meeting ended unhappily, with no one able to convince the other, and all four parties primarily standing by their own perspectives.
No right or wrong, only interests!
Chen Pingjiang frowned slightly.
The situation was more complex than he had imagined, especially since this point in time was three years earlier than Tencent's negotiations with the three major operators back then.
"It seems this isn't something that can be resolved overnight,"
Chen Pingjiang said slowly.
Li Xi also nodded in agreement:
"Today was just everyone clarifying their views. It's normal not to reach a consensus. I estimate it will take several months to negotiate. Telecom is only thinking of promoting its own Fetion Feiliao. I expect Mobile and Unicom will also launch their own instant messaging software next. Many foreign operators have done the same. But they definitely won't be our rivals."
Chen Pingjiang said:
"The entry point will be Telecom. They are eager to open up the market, increase user numbers and market share, and have the least resistance to OTT."
"Uh, Chairman Chen, how do you plan to do it?"
"It's simple: partner with Telecom to create a SIM card, using Telecom's number range. Users can then use all of our Renren.com applications for free. Telecom wants users, and we'll give them users."
Li Xi's eyes lit up:
"That's a great idea."
Chen Pingjiang was referring to Tencent's King Card from back then, which allowed free use of hundreds of applications, including data-intensive ones like Tencent Video and Honor of Kings.
Although data fees were more expensive in those days, 3 yuan for 10MB, 5 yuan for 30MB, 10 yuan for 70MB, 20 yuan for 150MB.
But similarly, there weren't as many data-intensive applications yet.
This was clearly a win-win cooperation.
It's hard for people who didn't experience that era to understand.
Back then, how could WeChat dare to run in the background constantly?
You could play small games, but if you wanted to watch videos, you had to spend more money.
In that era, anyone who activated 1GB was a symbol of wealth and could watch videos.
Why is it said that Chen Pingjiang was only qualified to make short videos after 4G became widespread?
It's because of network tariffs!
If network tariffs didn't decrease, it simply couldn't become widespread.
It's almost foreseeable that as soon as Chen Pingjiang finalizes this cooperation, the activity level of WeChat and Weibo users will inevitably reach a new level.
The tug-of-war with the three major operators wouldn't be resolved in a single day.
They could only wait patiently and continue to stall.
Stall until the 4G era arrived, and then use incentives.
(End of chapter)