Started first half of 2001, China Mobile’s open platform for third party companies to provide value added services, such as ringtones and picture downloads, used to be a heaven for companies like Linktone and Hurray.
Copying the i-mode business model of Japan’s NTT Docomo, China Mobile launched its Monternet platform to promote wireless data services. Under the platform, the third party services providers offer content and services to mobile subscribers and China Mobile collects information fees on behalf of them through its billing system.
They pay China Mobile commissions of 15 percent of the revenues collected. The uniform service platform and billing channel that China Mobile launched allowed third party players to build profitable businesses around mobile data services, and a large number of services providers entered the sector. That, in turn, attracted more data users and generated traffic fees and billing commissions for the mobile operators. It was estimated there are about 2000 services providers in China, according to a report from International Finance Corp.
When China internet was still in its infancy, all the major internet portals, such as Sina, Sohu and Netease, used to be depending heavily on the wireless services for revenue. In the fourth quarter of 2004, wireless revenue accounted for 63 percent of Sina, China’s largest online portal.
But China Mobile’s changing policies has constantly caused setback to the third party service providers.
It happened once in late 2004 when China Mobile wanted to clean up porn content. “Porn websites were billing their customers through the wireless value added service providers,” said Mr Wei. The latest shake up happened when it issue the user protection rules last summer.
Morgan Stanley estimated the first round of regulation tightening has cause 33 percent drop in share prices for the top four wireless players. The second round, 57 percent.
Partly due to regulatory risks, mobile value-added service providers (Tom Online and Kongzhong) are trading at 30 – 50 percent discounts in earnings multiples relative to online advertising companies (Sina and Sohu), wrote Richard Ji, executive director of Morgan Stanley in a report. Kongzhong’s market capitalisation is only about US$ 180 million, while its cash on hand is about US$115 million.
I am a journalist and I work for the leading English language newspaper in Asia, South China Morning Post. For the past two and a half years, my focus is China Internet. I witnessed its increasing importance in the Chinese society and its gradual acceptance to investors worldwide.
More about Me
- Sherman So
- Before that, I worked on a startup with a partner and had been a business strategist of a Hong Kong tycoon who wanted to develop Internet business as an extension of his hotel and property enterprise. I hold an MBA and my undergraduate degree is computer science major. Just like many of the entrepreneurs I talked to in my job, I had had the same dream as founding my own company as Internet emerged. I took the job as journalist because I wanted to have first hand access of the development of China Internet sector, as many of the material written on the subject looked shallow if not bizarre, as if they were done by someone don’t know much but merely to satisfied an instant curiosity on the subject. Or they just looked a single factor of the whole picture.
Book draft - China Internet
I am currently working on a book about China Internet.
With both business and reporting experience, I think I can write a book that is comprehensive, informative and entertaining, reaching audience worldwide who really want to know about China Internet, entrepreneurships in one of the world fastest developing economy, as well as a good story.
Helping me to write the book is a former colleague of mine, James Allen, who has been business editor for the past twenty years – working for prestige business news agencies, such as, Wall Street Journal, Reuters, Bloomberg, etc.
view Book draft - Introduction
view Book proposal
With both business and reporting experience, I think I can write a book that is comprehensive, informative and entertaining, reaching audience worldwide who really want to know about China Internet, entrepreneurships in one of the world fastest developing economy, as well as a good story.
Helping me to write the book is a former colleague of mine, James Allen, who has been business editor for the past twenty years – working for prestige business news agencies, such as, Wall Street Journal, Reuters, Bloomberg, etc.
view Book draft - Introduction
view Book proposal
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