According to statistics from the Ministry of Information Industry (MII), China’s 426 million mobile phone users sent more than 200 billion short messages in the first half of the year. Last month, Worlds biggest mobile market started an initiative to cleanup the wireless value-added services industry.
Under the policy directives of China’s Ministry of Information Industry, In order to reduce subscriber complaints and increase overall customer satisfaction, several of China’s mobile network operators introduced new policies for all subscription services.
China Mobile Ltd., China’s largest mobile telecoms company with 260 million subscribers, introduced following new policies for service providers:
1) Extension of free trial period to between 11 and 41 days.
2) Billing reminders to existing SMS, MMS and WAP monthly subscribers regarding their subscriptions and fees being charged.
3) Conversion of per message-based SMS subscriptions to monthly subscriptions upon positive confirmation by the user. If no confirmation is sent, then the user’s subscription is automatically cancelled.
China Unicom, the country’s second largest mobile carrier with 130 million subscribers, also introduced polices to convert all per message-based SMS subscriptions to monthly subscriptions.
Response from China’s leading wireless Internet companies was mixed:
TOM Online Inc, NASDAQ listed, VAS provider believes the short term impact will be negative and significant. They believe, it would result in increased churn of monthly subscription base during the period of sending subscription reminders to existing users, and new policies have the potential to shorten the Company’s average subscription duration (from when subscribers sign up for service to when they cancel) to less than the current range of about 3-months, due to the addition of a free trial period. Although user subscriptions will be affected in the near term, the industry’s overall development is likely to benefit in the longer term.
SINA Corporation, another NASDAQ listed, mobile value-added service provider also believes that these policy changes will reduce the Companies ability to acquire new monthly MVAS subscribers and increase churn of the Companies existing monthly MVAS subscribers.
Sohu.com Inc, expects these new policies to reduce Sohu’s wireless revenue by approximately US$1.5 million to US$2.5 million per quarter for the third and fourth quarters of 2006.
China’s telecoms regulator has also released a list of 102 companies engaged in illegal behavior in the country’s wireless value-added services industry. The new list, whose names include units of software maker Kingsoft and Shanghai Sifang Information Technology, was published on the Ministry of Information Industry’s Web site (www.mii.gov.cn)
I think telecom regulators and Mobile operators are seeking to create an industry environment for the longer term wherein a significantly smaller group of preferred VAS players will be able to prosper and are likely therefore to enjoy larger market shares.
I don’t know the current state of customer satisfaction/billing transparency of WVAS in India, but I would definitely like to see industry initiatives to maintain good quality of customer service.
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