China Mobile plans portal fees

PUBLISHED : Tuesday, 24 April, 2007, 12:00am
UPDATED : Tuesday, 24 April, 2007, 12:00am

Operator seeks bigger revenue slice from content providers

China Mobile, the nation's largest mobile-telephone operator, wants to charge for access to all mobile internet portals that offer content downloads as the company tries to boost revenue from the sector from last year's 1 per cent of turnover, industry sources said.

Subscribers at present can access more than 50,000 free wireless application protocol, or WAP, portals, many of which offer content free through the internet and bypass China Mobile's Monternet value-added service platform.

Mobile content providers joining the Monternet platform are charged 15 per cent of revenue they earn from the carrier's subscribers.

Chairman Wang Jianzhou confirmed at the weekend that his company intended to strengthen its content service and ties with the country's content providers.

'We need to build a win-win situation for both our company and content providers for this new media,' he said on the sidelines of the Boao Forum for Asia in Hainan.

To encourage subscribers to access the mobile internet, China Mobile and China Unicom last year launched a flat-rate mobile internet browsing charge of about 20 yuan per month.

At the same time, several mobile internet portals such as were established to offer news, ringtone downloads and other content for users, often for free. The providers of free content survive through a mix of venture capital investment and advertising revenue.

China Mobile wants to force users to enter its Monternet site when they start to browse the mobile internet. A source said China Mobile's move would lead to the company earning more revenue from content.

'The new arrangement will harm the free mobile portal business as users may divert to browse China Mobile content. The company may also charge users when they access sites not in China Mobile's camp, and this would further affect the traffic of those sites,' the source said.

Mr Wang said various business models were being studied, as the rise of free mobile internet portals indicated convergence between media and telecommunications services.

Differences between the telecommunications and media industries have resulted in a variety of ways to secure revenue from mobile content, such as pay per usage, pay per download or content, and advertising.

'For China Mobile, we hope to build up a charge-for-content business model,' Mr Wang said.

'Under our revenue-sharing business model, content providers take 85 per cent of the revenue and China Mobile takes only 15 per cent.

'The total revenue from content is only 1 per cent, and other non-voice revenue comes from base services such as messaging and internet traffic,' he said.

'Free WAP portal services may have an impact on our content-driven business model, but as it also exists in other countries, we need to strike a balance to jointly develop this market.'