Analysys International Says the Keys to Chinese SPs' Survival Rely on Optimizing Marketing and R&D Spending

Analysys International Says the Keys to Chinese SPs' Survival Rely on Optimizing Marketing and R&D Spending

July 25, 2006

    BEIJING, July 25 /Xinhua-PRNewswire/ -- Analysys
International, a leading Internet based provider of
business information about technology, media and telecom
(TMT) industries in China, says Chinese SPs' revenue will
be affected by mobile carriers' and MII's policies to a
certain degree; however, optimizing marketing and R&D
spending should be the key to reduce the impact brought by
the related regulations. 

    News Background

    China Mobile recently notified value-added service
providers (SP) of its policy changes for all mobile value
added services (including SMS, MMS and WAP) subscriptions
on its Monternet platform, which include an extended trial
period, double reminder and unified unsubscription
channels.  

    Affected by the news, stocks of listed SPs including
Tom Online, Kongzhong.net, 51job.com, Sohu, Sina, and
Linktone, all dropped.

    Quick Analysis

    Mobile value-added services are the major revenue
source to these listed companies.  Affected by mobile
operators' regulation and MII's policies, the market faces
adjustment.  The industry now has higher requirements to
SPs, which will speed up the survival-of-the-fittest market
rule.  Those SPs who lack core competency will be washed
out; while those leading SPs will further expand market
shares and increase market influences.

    Currently the market leaders occupy the market shares
mainly by their channel and product advantages.  And now,
more SPs will fight for the limited market share and
profit.  Analysys International says SPs should establish
new marketing channels as well as improving applications
combined with handset marketing resources and innovation of
TV media resources; on the other hand, SPs should look for
new channels through direct marketing or creating other
Internet services marketing channels.

    Affected by the regulations, R&D and marketing
spending on the traditional services, including SMS, WAP
and MMS, will go down.  SPs should look for new services
that would bring revenue.  Analysys International says
R&D spending on new services will increase, such as
mobile search and location services.

    Currently, SPs' cost expenditure mainly consists of
personnel expenses, marketing expenses, R&D and daily
spending.  As revenue goes down, it is necessary to reduce
costs and optimize the spending on marketing and R&D. 

    About Analysys International 

    Analysys International is the leading Internet based
provider of business information about Technology, Media
and Telecom industry in China.  We provide data,
information and advice to 50,000 clients worldwide
representing 1,500 distinct organizations, deliver over 150
consulting engagements a year, and hold more than 20 events
that draw in over 8,000 attendees.  Our clients include
executives from companies as technology vendors, vertical
information technology users, as well as professionals from
professional service companies, the investment community and
government agencies.  Our mission is simple and clear: we
help our clients make better business decisions.  For more
information, please visit our web site at
http://english.analysys.com.cn .

    For more information, please contact:

     Jessica Wang
     Overseas Media Manager
     Analysys International
     Tel:   [phone] x394
     Fax:   [phone]
     Email: [e-mail]

SOURCE  Analysys International