Cut-throat competition in the IDD business has taken a toll on China Motion Telecom International, pushing the telecommunications operator back in the red after a brief year of profitability. Despite a 9 per cent gain in turnover to HK$386.5 million, China Motion recorded a net loss of 27.38 million for the six months through September. In the previous corresponding half year, China Motion recorded a $5.14 million net profit on $353.66 million in sales revenue. Chairman Hau Tung-ying said a drop in IDD tariffs and initial losses incurred from its mobile virtual network operation (MVNO) were the key reasons behind the half-year loss. Tariffs for IDD business, the firm's major revenue generator, fell from between three and four US cents per minute at the beginning of the year to about one cent. A price war in the mobile business has lengthened the company's investment pay-back period for its MVNO business - a mobile service that is offered by leasing capacity from other network operators - from two years to between three and four years. The IDD business resulted in a $9.7 million operating loss for the six months, compared with a $10.3 million operating profit a year ago. Its MVNO business - launched in August - recorded a $27.4 million operating loss for the period. Although China Motion said it did not expect IDD tariffs to fall much further as prices had reached rock bottom, the main board-listed company was not optimistic of a return to the black for the full year. Without much hope for a rebound in IDD business or an early turnaround of its MVNO business, China Motion plans to halve its operating costs to help narrow the losses. Staff cuts are planned. In the second half year, China Motion plans to spend HK$30 million, mainly to build a fibre-optic network to link up with China Telecom's cables running from Shenzhen to Guangzhou.