Wireless value-added service providers witness steady growth

The Chinese wireless value-added service market will still achieve steady growth, despite the ongoing regulatory campaign and a reshuffling of the industry, says a domestic professional Internet research house iResearch.

"The overall trend of the wireless value-added service market is good and the prospects are bright," said Henry Yang, president of Shanghai-based iResearch.

He said he believed the popularity of smart phones, the enrichment of content of wireless value-added services, and the launch of the third generation mobile communications systems would lead to greater prosperity of the industry, according to China Daily's report on Tuesday.

The regulatory campaign and the upgrading of mobile operators' technology would lay a solid ground for future growth.

The country's dominant mobile operator, China Mobile, last year started to build a uniform billing platform to punish cheating on its subscribers by service providers (SPs) and revoke licences of some SPs who did not meet requirements.

From the second quarter of this year, the Chinese Government started moves to clean up pornographic content, especially on the Internet. Mobile SPs, which are closely related to the Internet, also became a focus of the campaign.

Many big SPs including Sina Corp, Sohu, Kongzhong were fined or had services suspended in the campaign.

Yang said he believed the regulatory campaign would not have fatal consequences for big SPs, but smaller companies might find it more difficult to survive.

Because of the regulatory campaign's impact, the industry will grow by 65 per cent to 38.54 billion yuan (US$4.65 billion) this year, compared to the 149 per cent year-on-year growth in 2003, according to a recent report on the wireless value-added service market.

The growth will further decline to 41 per cent and 35 per cent next year and 2006 respectively.

The growth of SP value-added services will also fall from 160 per cent last year to 89.6 per cent this year and revenues are forecast to reach 8.14 billion yuan (US$1.01 billion).

However, with faster growth than that of phone-to-phone services, the proportion of the whole wireless value-added service market will increase from 19 per cent at the end of 2003 to 21.8 per cent this year.

The growth of the popular short messaging services (SMSs) will also slow down, with the regulatory campaign and the development of the market, from 144 per cent in 2003 to 30 per cent this year.

Source: China Daily