China Mobile policy may hurt business, wireless firms say

14 Jul 2006

The policy changes imposed by wireless carrier China Mobile could have a negative impact on the operations of Chinese wireless and online firms, Tom Online and, in separate statements, said.
Tom, a wireless Internet company in China, said it had received a notice on policy changes for all subscription services on China Mobile's Monternet platform.
Although the firm is currently in the process of making a detailed assessment of the potential impact of the new policies on the company's wireless Internet business, it believes the impact will be "negative and significant."
New policies introduced by China Mobile include the extension of trial periods and double reminders for new monthly subscriptions, set for a July implementation; billing reminders to existing monthly subscribers, set for August to September implementation; and conversion of per message-based SMS subscriptions to monthly subscriptions.
Tom Online said it believes the actual policies changes could have an impact significantly more negative than previously considered., an online media, search and mobile value-added services, meanwhile said
the new policies could reduce Sohu's wireless revenue by approximately $1.5 million to $2.5 million per quarter for the third and fourth quarters of 2006.
For the first quarter of Sohu's wireless revenues were $8 million, representing approximately 26% of our total revenue with a gross profit margin of 52 %, the company said in a release.

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