Kakao and VK are in talks to find Iranian partners to enter Iran’s market. The news is based on the facts that we are going to represent here and an anonymous tip that we’ve received yesterday to back this story up.
It was nearly a month ago that Iran Supreme Council of Cyberspace announced the new regulations regarding the messaging apps in Iran. Yesterday we got another news from Iran Supreme Council of Cyberspace regarding the foreign messaging apps. In a meeting held by the Iranian president, Hassan Rouhani at Iran’s high council of virtual space last Saturday, a complete guideline for local social media platforms and also messaging applications were discussed. According to the new regulations, foreign messaging apps which are moving their servers into the country will also get the government support, otherwise, they won’t get any support from the government. Also, foreign messaging apps with over 50% of equity owned by Iranians and also registered as a company in the country will be considered as local messaging apps. But what are these incentives that government is offering?
Incentive policies for domestic social media and messaging apps:
- If an app has up to 1 million users, the government would let them do advertisement on their platform.
- If an app has 1 million up to 3 million users, the government organizations must support the app by advertising on their platform.
- If an app has 3 million up to 5 million users, the government would grant them a license to have banking and eGovernment services.
- If an app has over 5 million users, the government would connect them to the telecommunications network and treat them as an operator. The telecommunications operator license costs around 300 million euros in Iran which would be a good incentive for these kinds of apps.
A month ago, the new incentives for the domestic messaging apps and social media platforms were announced and now we have the government incentives for foreign messaging apps and social media platforms which are willing to find an Iranian partner in the country with more than 50% in equity share. It’s obvious that the government is approving these new rules to attract foreign messaging apps and social media platforms to find an Iranian partner and move their servers into the country, something that they couldn’t do with Telegram.
KakaoTalk and VK Are in Talks to Find Iranian Partners
After publishing yesterday’s news about the new regulations regarding the foreign messaging apps, TechRasa got an anonymous tip that KakaoTalk and VK are looking for Iranian partners in the country to enter Iran’s market. Even we got a tip that KakaoTalk had a meeting with HiWEB but we don’t know if they’ve partnered up yet. Also, in October 2016, Vodafone announced: “Today Vodafone and HiWEB, a leading Iranian ISP, jointly announced a new non-equity Partner Market agreement for Iran.”, this is another sign that HiWEB could be one of the main potential partners for the foreign messaging apps.
When we look at the new regulations especially regarding the foreign messaging apps, we realized that it would add up to the whole story. Let’s take a Look at these two companies:
KakaoTalk: KakaoTalk or sometimes KaTalk, is a free mobile instant messaging application for smartphones with free text and free call features. KakaoTalk was launched in 2010 and currently, has 170 million users and is available in 15 languages. The app is also used by 93% of smartphone owners in South Korea.
VK: VK is the largest European online social media and social networking service based in St Petersburg, Russia. It is available in several languages and is especially popular among Russian-speaking users. VK allows users to message each other publicly or privately, to create groups, public pages and events, share and tag images, audio and video, and to play browser-based games. As of January 2017, VK had at least 410 million accounts. VK is the second most popular website in Russia, after Yandex. VK is also founded by Pavel Durov the founder of Telegram messaging app which is the dominant messaging app in Iran. Founder Pavel Durov was dismissed as CEO in April 2014 after (according to himself) he had failed to retract an April fools letter of resignation as a prank.
As you can see the origins of these company are from Russia and South Korea which have a really good relationship with Iran. In Oct 2015, Iran’s Minister of Communications in a meeting with his Russian counterpart agreed upon the presence of Yandex in Iran. We even have an unofficial news that Yandex.Taxi is in preparation to enter Iran’s market to compete with Snapp, the leading UberClone in Iran. Regarding South Korea, it’s enough to say that most of the electronic products in Iran are supplied by Samsung or LG. If you are wondering Samsung’s position in Iran, we suggest you head to the “Samsung Electronics Might Win Iran’s ICT Sector” article. We should also mention that Samsung is even building a hospital in the Shiraz province of Iran.
Telegram the Dominant Messaging App in Iran
Telegram has become the main app for texting in the past two years in Iran. Before Telegram entered the country, people were using Viber, Line, WeChat and other messaging apps until the government blocked some of them due to security issues and immoral activities that were taking place on these platforms.
With “super groups” and channel features, Telegram has obtained some social media aspects which have widely been welcomed by Iranian users. The hot to-go-to entertainment hub has 100,000 channels from jokes and prank videos to cultural and music content. With this wave, many companies started to create their channels on Telegram. From news outlets to famous brands, even boutiques have created their own brand channels.
When there are only a limited number of unblocked social media platforms where businesses could advertise, this is where Telegram enters the game organically. Commercialized channels normally have 15 to 20 non-ad posts per day and in between, they have 5 to 8 ads per day. These channels would charge the advertisers based on their number of members, reputation and line of work, such as the news channels which some of them belong to the news agencies and news outlets. TechRasa’s estimation of Iranian Telegram channels revenue is $23.3M, which you can head to this post to find out how we came up with this number.
TechRasa has published a white paper on Iran advertising technology or simply AdTech. The white paper is available for free to get a good grasp of Telegram channel’s revenue and the AdTech landscape in Iran. Iran AdTech Overview whitepaper is sponsored by Adro AdExchange, Iran’s first AdExchange opening Iran’s online advertising landscape to the world. Here is the Non-digital and Digital Ad Spend in Iran:
Right now Telegram has more than 17M installs only from the domestic android market Cafe Bazaar. With 40M smartphones in the country, over 6 million iPhones and everyone from a 10-year-old to a grandparent using Telegram, we estimate that this number must be much more than this.
Despite the government’s demand, Telegram hasn’t moved its servers to Iran yet. With this initiative from the government and VK moving in without Pavel Durov’s Telegram, we still don’t know what could happen to this messaging app. Apart from this, a little bit of competition could warm up the scene of messaging apps in the country to bring more features and updates based on today’s market demand. Since the mobile payment is rising up in the country, integrating payment methods with messaging apps could bring considerable profit for these companies.
With these initiatives and the upcoming international partnership with Iranian companies, we hope to see more developments in Iran’s startup ecosystem and better services for the end users and people.