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MobileValueAddedServices Mobile Value Added Services China

January2010

ExecutiveSummary
MVASmarketinChinaisvaluedatUSD18.2bnin2008;expectedtoreachUSD34.5bnby2011 Atpresent,80%ofthemobileconsumersareusingmobilevalueaddedservices SMSandCallerRingBackTones(CRBT)arethetwomostpopularMVASservicesinChina MVASprovidersrelyprimarilyonmobileoperatorstoprovidebillingandcollectionservices

Market

Drivers:

Challenges:
MVASprovidersarehighlydependent ontelecomoperators on telecom operators CompetitionfromfreeWAPsites Billingandtransmissionfailures

Drivers& Di & Challenges

Increasingmobilepenetration Growingpopularityofmobileentertainment l f bl Risingincomelevels DecliningARPU Introductionof3G

MarketcomprisesoffourtypesofMVASplayers
PureMVASPlayers InternetPortalOperators Sina Tom TelecomOperators ChinaMobile ChinaUnicom NicheServiceProvider Tencent

Competition C titi

g g Kongzhong Hurray!Holding

MVASfirmsalsofacecompetitionfromfreeWAPportals Relationship between mobile operators and MVAS firms is changing from cooperation to RelationshipbetweenmobileoperatorsandMVASfirmsischangingfromcooperationto competition
MOBILEVALUEADDEDSERVICES CHINA.PPT

Introduction Introduction ValueChainandServices MarketEntryProcedure Market Entry Procedure GovernmentRegulations MarketOverview Drivers&Challenges Competition KeyDevelopments y p
MOBILEVALUEADDEDSERVICES CHINA.PPT

TheChinesemobilemarkethastheworldslargest subscriberbaseanditisgrowingat18%annually
MobileMarketinChina
TheChinesemarkethasthreemobile operatorswithChinaMobiledominating:
ChinaMobile ChinaUnicom ChinaTelecom

MobileSubscribers
mn
800 600 400 200 0 461

+18%
641 548

Total Revenues: Chinas three main telecom TotalRevenues:China sthreemaintelecom firmsattainedacombinedrevenueofUSD103 bnin2008 TotalSubscribers: 982.2mn(2008)
Mobile subscribers account for 65% of total Mobilesubscribersaccountfor65%oftotal subscriberbase

2006

2007

2008

WirelessOperatorsMarketShare(2008)
ChinaTelecom ChinaUnicom 21.5% 4.5%

PrepaidtoPostpaidratio 2:1 Projections2010:


Telecombusinessvolume:12%growth Businessrevenue:4.5%growth 817mnmobilesubscribers

73.9% ChinaMobile China Mobile

MOBILEVALUEADDEDSERVICES CHINA.PPT

Introduction Introduction ValueChainandServices MarketEntryProcedure Market Entry Procedure GovernmentRegulations MarketOverview Drivers&Challenges Competition KeyDevelopments y p
MOBILEVALUEADDEDSERVICES CHINA.PPT

Thevaluechainincludesoperators,contentdevelopers,and serviceproviderswiththelattergettingthebulkofrevenue
Content Content

Monternet ChinaMobile Operator UniInfo ChinaUnicom

Content

Content Developer

Service Provider

Payment

Payment

Payment

Users/ Buyers

Content Developer ServiceProvider S i P id Operator

Contentprovidersdevelopcontentsuchasthewallpapers,games,ringtonesetc. Serviceprovidersproduce,aggregateandrepackagecontentasmobilevalueaddedservices p p , gg g p g whicharedeliveredthroughthemobileoperatorsnetwork Mobileoperatorsdelivervalueaddedservicesthroughtheirnetwork Monternet UniInfo UniInfoisoperatedbyChinaUnicom Revenuesplitis90:10 Serviceproviderstakemajorityofshare

Content Delivery Platforms

MonternetisoperatedbyChinaMobile Revenuesplitis91:9or85:15depending onwhichpartybillsendusers Service providers take majority of share Serviceproviderstakemajorityofshare

MOBILEVALUEADDEDSERVICES CHINA.PPT

ServicesOffered
PopularMVASServices

NewsandInformation Headlinenews Financialnews Technologynews Sportsnews p Weatherforecast Fortunetelling Jokes

Community y Datingandfriendship Gamesandquizzes Educationalproducts p Email

MultimediaDownloads Ringtones Logosandpictures Screensavers Music VideoClips

PopularServicesbyMobileGeneration

2G

2.5G 2.5 G

3G 3G

SMS

IVRS

CRBT

WAP

MMS

Mobile TV

Video on on Demand

Location Based Based Services

MOBILEVALUEADDEDSERVICES CHINA.PPT

Introduction Introduction ValueChainandServices MarketEntryProcedure Market Entry Procedure GovernmentRegulations MarketOverview Drivers&Challenges Competition KeyDevelopments y p
MOBILEVALUEADDEDSERVICES CHINA.PPT

TheentryprocedureforofferingMVASisconsideredtobe lengthyanddifficult
FindChineseVASPartner

EstablishForeigninvested telecomenterprise(FITE)

Maximum50%shareofforeigncompany

ProvideVAS across several provinces

No

Applicationto Telecom AdministrationBureau (TAB)oftheprovince (TAB) of the province

Min.registeredcapital USD146,430

Yes
ApplyforVAS licensewith Ministryof Information Industry(MII)

Min.registeredcapital USD1,464,300

ObtainVASlicense

ApplyforCompliance Testingwithmobile operator

ProvideMVAS Services

MOBILEVALUEADDEDSERVICES CHINA.PPT

Governmentrequirementsvarydependingonthestageor statusofanentityforbecomingaMVASprovider
StagesinMarketEntry
MVASprovidersneedaminimumregisteredcapitalofUSD1.46mnforprovidingservicesacrossprovinces MinimumregisteredcapitalisUSD146,430forprovidingMVASservicesinoneprovince,anautonomousregion, oramunicipality Theultimatecapitalcontributionratiooftheforeigninvestorsinaforeignfundedtelecommunications enterpriseprovidingvalueaddedtelecommunicationsservicescannotexceed50%

EstablishFITE

MajorChineseinvestorisdefinedasinvestorhavingminimum30%shareamongstallChineseinvestors
M j Chi MajorChineseinvestormustpossessappropriatefundsandspecializedstaffaccordingtorequirementsstipulatedbyMII i t t i t f d d i li d t ff di t i t ti l t d b MII

ProjectproposalanddocumentshavetobesubmittedtoManagementDepartmentofInformationIndustry TheapplicantarerequiredtosubmitcontractsusedtoestablishaFITEtoMinistryofCommerce LicensehastobeacquiredfromManagementDepartmentofInformationIndustry Enterprise registering procedure has to be completed in Bureau of Industry &Business Administration EnterpriseregisteringprocedurehastobecompletedinBureauofIndustry&BusinessAdministration

Applyfora licenseasa serviceprovider service provider Cooperationwith amobile operator t

OnlyanapprovedForeignInvestedTelecomEnterprisescanapplyforMVASlicense ThecompanymustapplytothelocalTABforthelicensetoprovidevalueaddedserviceswithinasingleprovince ThecompanymustapplytoMIIforthelicensetoprovidevalueaddedservicescoveringmultiprovinces Theperiodofvalidityofthelicenseis5years

MVASproviderhavetoclearconformancetestsfrommobileoperator Finally,MVASprovidersnegotiatecontractswithoperatorsforserviceprovision

MOBILEVALUEADDEDSERVICES CHINA.PPT

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Introduction Introduction ValueChainandServices MarketEntryProcedure Market Entry Procedure GovernmentRegulations MarketOverview Drivers&Challenges Competition KeyDevelopments y p
MOBILEVALUEADDEDSERVICES CHINA.PPT

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MVASindustryishighlyregulatedinChina
RegulationsfortheAdministrationofForeignInvestedTelecommunicationsEnterprises
A foreign entity is prohibited from owning more than 50% of the total equity in any valueadded telecommunication services business in China Under M&A Rules, equity or assets merger and acquisition of PRC enterprises by foreign investors are subject to approval from the Ministry of Commerce or its competent local branches

ShortMessageServices Sh S i

Government Regulations

TelecomoperatorsmayonlycooperatewithlicensedinformationserviceprovidersforSMS CertaintypesofSMSrequirecustomersexplicitconfirmationonacceptanceofchargesbeforesuchservices couldbebilledfor Theserviceprovidersneedtoprovideaneasyandclearcancellationmechanismfortheircustomers

PricingandBillingofMobileInformationServices
The pricing and billing of MVAS must be accurate clear and fair ThepricingandbillingofMVASmustbeaccurate,clearandfair Mobilevalueaddedserviceprovidercannotchargeacustomerunlessthecustomerrespondstotwo customerrequests Serviceprovidershavetomaintaindetailedinvoicesforeachcustomerformorethanfivemonths Telecomoperatorsarerequiredtofirstdealwithcustomercomplaints,requestsforrefundsandrelated matters

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MVASfirmsneedtoobtainvariousapprovalsforproviding internetpublications,games&audiovisualservices
RegulationforInternetPublication
The Internet Publication Measures require internet publishers to secure approval from the State News and Publications Administration (SNPA) to conduct internet publication activities Internet publication includes online dissemination of books, newspapers, periodicals, audio and video products, electronic publications, and other sources that have already been formally published or works that have been made public in other media

RegulationforInternetGamesandCultureActivities Regulation for Internet Games and Culture Activities

Government Regulations

TheInternetCultureMeasurescameintoeffectonJuly,2003 ServiceproviderisrequiredtoobtainalicenseforInternetCultureBusinessOperationsfromtheMinistryof Culture

RegulationforInternetAudiovisualProgramServices
StateAdministrationofRadio,Film,andTelevision(SARFT)andtheMinistryofIndustryandInformation TechnologyjointlyissuedtheRulesfortheadministrationofInternetaudiovisualprogramserviceswhich cameintoeffectasofJanuary31,2008 Therulesapplytotheprovisionofaudiovisualprogramserviceviainternetincludingmobileinternet ProvidersofinternetaudiovisualprogramservicesarerequiredtoobtainanInternetAudiovisualLicenseor completecertainregistrationprocedurespriortoprovidingAudiovisualProgramServices Serviceproviderswhowereengagedininternetaudiovisualprogramservicespriortothepromulgationof therulesandwhohavenotviolatedanyotherlawsorregulationsareeligibletoregistertheirbusinessand th l d h h t i l t d th l l ti li ibl t i t th i b i d continuetheiroperations

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Introduction Introduction ValueChainandServices MarketEntryProcedure Market Entry Procedure GovernmentRegulations MarketOverview Drivers&Challenges Competition KeyDevelopments y p
MOBILEVALUEADDEDSERVICES CHINA.PPT

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MVASisgrowingat29%annuallyasoperatorsdiversify revenuesfromnonvoiceservicestooffsetdecliningARPU
MarketOverview
MobileoperatorsinChinahavebeenaggressively promotingMVAStooffsetthedeclineinAverage RevenuePerUser(ARPU),whichispredominantly R P U (ARPU) hi h i d i l voicebasedrevenue Atpresent,80%ofmobileconsumersuseMVAS SMSandCallerRingBackTones(CRBT)arethetwo mostpopularMVASServicesinChina most popular MVAS Services in China %Revenue2008 SMS CRBT ChinaMobile 12.21% 3.5% 3 5% ChinaUnicom 10% 3.8% 3 8%

MarketSizeandGrowth
USD bn
40 30 20 10 0 9.6 34.5

+29%
18.2

2006

2008

2011e

VASsShareofTotalRevenue
China Telecom China Unicom China Mobile 25.7%
27.5%

AdvancedMVASservicesbasedonWAP/ MMS/Java/BREWplatformsarealsobecoming popular Currently Chinas mobile operators deliver their Currently,China smobileoperatorsdelivertheir servicesthrough2&2.5Gwirelessstandards
MVASmarketinChinaisevolvingfrom2Gservicesto2.5G andwillcontinuewith3Gstandards

9.0%

10.9% 0.8%

MVASprovidersrelyprimarilyonmobileoperatorsto providebillingandcollectionservices

n/a 2007

2008

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Introduction Introduction ValueChainandServices MarketEntryProcedure Market Entry Procedure GovernmentRegulations MarketOverview Drivers&Challenges Competition KeyDevelopments y p
MOBILEVALUEADDEDSERVICES CHINA.PPT

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Drivers Summary
IncreasingMobilePenetration RisingIncomelevels GrowingpopularityofMobile Entertainment

DemandSide

Drivers

SupplySide pp y

DecliningARPU

Introductionof3G

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Increasingmobilepenetrationandincomelevelsaredriving growthinChineseMVASindustry
IncreasingMobilePenetration
IncreasingmobilepenetrationhashelpedinthegrowthofMVASindustryinChina OverhalfofChinaspopulationnowhasmobilephones About80%ofChinasmobilephoneusersutilizemobilevalueaddedservices MobilePenetration %
60 40 20 0 35.0 41.6 54.3

Impact

2006

2007

2008

RisingIncomelevels
ChinahasexperiencedrapidgrowthinpercapitaGDPsinceitbeganreformsin1979 Therapidriseinlivingstandardshasthusincreaseddemandsfortelecomservicesinboth quantityandquality GDPGrowthRate% %
20 10 0 2002 2003 2004 2005 2006 2007 2008 9.1% 10.0% 10.1% 9.9% 11.1% 11.4% 9.0%

Impact

MOBILEVALUEADDEDSERVICES CHINA.PPT

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Growingpopularityofmobileentertainmentanddeclining ARPUaredrivinggrowthinthissector
GrowingpopularityofMobileEntertainment
Newmediaservicessuchasmobilemusic,games,andmobileTVarefastgainingpopularityin ChineseMVASmarket ChinaMobilelaunchedMusicClubinJuly2006incooperationwithserviceproviders,handset vendorscontentproviderswhichincludeEMI,Warner,SonyBMGandUniversal
Mobilemusicclubtoofferonestopservicesincludingmusicdownloadsandsharing

Impact

ChinaUnicomisincreasingdirectcooperationwithmusiccontentproviders,andhasalready signedcontractswithWarnerMusicandGlobalMusicInternationaloncontentsourcing signed contracts with Warner Music and Global Music International on content sourcing

DecliningAverageRevenuePerUser(ARPU)
Falling ARPU in telecom sector has made it imperative for telecom operators to search for other FallingARPUintelecomsectorhasmadeitimperativefortelecomoperatorstosearchforother lucrativerevenuesourcessuchasmobileVAS MonthlyARPUChinaMobile
USD
20 10 0 13.2

Impact

-6.1%
12.2 8.5

2006

2008

2013

MOBILEVALUEADDEDSERVICES CHINA.PPT

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Introductionof3Gservicesisapositivedevelopmentfor thissector
Introductionof3G
China'stelecomindustryenteredthe3GerainJanuary2009
ChinaMobile,haswonalicenseforTDSCDMA,thedomesticallydeveloped3GstandardwhileChinaTelecom andChinaUnicom,receivedlicensesfortheUSdevelopedCDMA2000andEurope'sWCDMA,respectively d Chi U i i d li f th US d l d CDMA2000 d E ' WCDMA ti l

Impact

3Ghighspeednetworksbeingcapableofhandlingfasterdatadownloads,allowinghandsetusers tomakevideocallsandwatchTVprograms Anonlinesurveyrevealedthat65%ofrespondentswouldchoose3Gnetworkservice 3G era will accelerate the growth of MVAS because the substantial improvements in data 3GerawillacceleratethegrowthofMVAS,becausethesubstantialimprovementsindata transferratesofthe3Gnetworkwouldencouragemoreapplicationsandservicestobe developed

MOBILEVALUEADDEDSERVICES CHINA.PPT

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Challenges Summary
MVASprovidersarehighly dependentontelecom operators

Challenges g

CompetitionfromfreeWAP sites it

BillingandTransmissionFailures g

MOBILEVALUEADDEDSERVICES CHINA.PPT

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Dependencyontelecomoperatorsandcompetitionfrom freeWAPwebsitesimpedeindustrygrowth
MVASprovidersarehighlydependentontelecomoperators
MVASprovidershavearrangementswithwirelessoperators,whoareentitledtoaserviceand transmissionfeeforthetransmissionofcontentaswellasbillingandcollectionservices MVASprovidersrelyontheoperatorstomaintainaccuraterecordsofthefeespaidbyusers MVASprovidersaredependentonoperatorsforprominentlypositioningtheirservicesonmenuof servicesforeachmajorservicecategory MVASprovidersgenerallypaymobileoperatorsupto15%ofthefeestheygeneratefromproviding servicestousersthroughmobileoperatorsnetwork i t th h bil t t k
ChinaMobileappliesa5050arrangementforsomeservicessuchasdownloadsofmobilevideoclips MobileoperatorsdeductanettransmissionchargefromMVASprovidersfees

Impact

Operatorshavedevelopedtheirownplatforms,whicharebetterintegratedintotheirservices, thusdirectlycompetingwithMVASproviders thus directly competing with MVAS providers


ChinaMobileisplanningtoimplementcentralizedmanagementofitsmusiccontentin2010 ChinaMobile'sprovincialbranchesareplanningtostopintroductionofnewCRBTpartnersandstoprenewalof contractswithexistingpartners

CompetitionfromfreeWAPsites
MVASprovidersfacecompetitionfromfreeWAPsitesinthemobileinternetmarket Thereareover9000freeWAPwebsitesinChina,mostofthemadoptfreebusinesspatterns similartothatofwebbasedsites FreeWAPsitesaccountforover90%ofdatatrafficonChinaMobilesnetwork

Impact

MOBILEVALUEADDEDSERVICES CHINA.PPT

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Billingandtransmissionfailureshamperindustrygrowth
BillingandTransmissionFailures
MVASserviceprovidersdonotcollectfeesfortheirservicesfromthetelecomoperatorsina numberofcircumstanceswhichinclude:
Deliveryofservicetoacustomerfailsonaccountofphonebeingturnedoffforanextendedperiod Customersprepaidphonecardhasrunoutofvalue Customerhasceasedtobeacustomeroftheapplicablemobileoperator TechnicalproblemswithnetworkoftelecomoperatorthuspreventingthedeliveryofMVASservices TechnicalproblemswithMVASprovider Technical problems with MVAS provider Customerrefusingtopayduetoqualityorotherproblems

Impact

Telecomoperatorsmonthlystatementstoserviceproviders,donotcontaininformationabout billingandtransmissionfailures
ThismakesitdifficultforMVASproviderstoeffectivelyanalyzetheirfinancialperformance Thus,MVASprovidersattimesoverpaycontentproviders

MOBILEVALUEADDEDSERVICES CHINA.PPT

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Introduction Introduction ValueChainandServices MarketEntryProcedure Market Entry Procedure GovernmentRegulations MarketOverview Drivers&Challenges Competition KeyDevelopments y p
MOBILEVALUEADDEDSERVICES CHINA.PPT

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MVASmarketcomprisesoffourtypesofplayers
CompetitionOverview
MarketcomprisesoffourtypesofMVASplayers:
PureMVASincludingcompanieslikeLinktone,KongZhong, MToneWireless Internetportaloperatorswhoalsoprovidemobilevalue addedserviceslikeTomGroup,SinacorporationandSohu NicheserviceprovidersincludescompanieslikeTencent whichspecializeinwirelessinstantmessaging which specialize in wireless instant messaging MobileoperatorsalsoprovideMVASservices

KeyParticipants
PureMVAS Players Pl Kongzhong Hurray! Hurray! Holding Linktone CDCMobile CDC M bil DigitalRed Enorbus Technologies PacificNet MOABC Internet Portal Operators Real Networks Tom Sina Sohu S h Netease Niche Service Provider Tencent Telecom operators t China Mobile China China Unicom China Telecom

RelationshipbetweenmobileoperatorsandMVAS firmsischangingfromcooperationtocompetition
Mobile operators are promoting their own services Mobileoperatorsarepromotingtheirownservices

ForeignplayersinMVASspaceincludeRealnetworks MVASprovidersalsofacecompetitionfromother Websitesthatoffersonlinecontentandonline communityservices community services MVASplayersprocurecontentthroughinhouse developmentandallianceswithinternationaland localbrandedcontentpartners

MOBILEVALUEADDEDSERVICES CHINA.PPT

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MajorPlayers(1/8)
Player BusinessDescription ChinaMobileisthelargestmobilephoneoperatorinChina ChinaMobileoperatesnotonlybasicmobilevoiceservicesbutalsovalueaddedservices suchasdata,IPtelephoneandmultimedia h d IP l h d l i di ItsownVASplatformisMonternet ChinaMobilegenerated27%ofitsrevenuein2008throughMVASservice Financials: ItrecordedoperatingrevenuesofUSD60.4bnandanoperatingprofitofUSD21.9bnin2008 ItwasfoundedasaGovernmentownedcorporation,inJuly1994,bytheMinistryof InformationIndustry China Unicom now operates GSM and WCDMA networks ChinaUnicomnowoperatesGSMandWCDMAnetworks Itoperatesthemobilemusicportalwww.10155.com Itisincreasingdirectcooperationwithmusiccontentproviders,andhasalreadysigned contractswithWarnerMusicandGlobalMusicInternationaloncontentsourcing China Unicom Shanghai launched its own application store WO Storein2009 ChinaUnicomShanghailauncheditsownapplicationstore WOStore in 2009 Financials: ItrecordedrevenuesofUSD21.3bnandnetincomeofUSD4.9bnin2008

ChinaMobile

ChinaUnicom

Note:Thislistisnotexhaustive MOBILEVALUEADDEDSERVICES CHINA.PPT

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MajorPlayers(2/8)
Player BusinessDescription ThecompanyisheadquarteredinBeijing,China ItstartedofferingCDMAmobilevoiceservicesinthefourthquarterof2008,following acquisitionoftheCDMABusinessfromChinaUnicom iii f h CDMA B i f Chi U i ItcurrentlyoffersmobilevalueaddedservicessuchasmobileColorRingTones ItisplanningtoprovidecolorfulSMS,mobilenewspaper,mobilemultimediamailbox servicesandothermobilevalueaddedservices Chi T l ChinaTelecomhaswonCDMA2000licensein2009 h CDMA 2000 li i 2009 ItisplanningtoinvestinproductR&Dandacceleratethelaunchofnewproductssoasto meetthemarketdemandforthe3Gserviceapplications Financials: I ItrecordedoperatingrevenuesofUSD27.4bnandanoperatingincomeofUSD754mnin d d i f USD 27 4 b d i i f USD 754 i 2008 ItsproductsincludeSMS,WAP,MMS,J2ME,IVRandCRBTetc. CDCMobileisthewhollyownedsubsidiaryofChina.com CDC Mobile is the wholly owned subsidiary of China.com ItdevelopsMobileApplicationsforLocalGovernmentOrganizationsinChina

ChinaTelecom

CDCMobile

Note:Thislistisnotexhaustive MOBILEVALUEADDEDSERVICES CHINA.PPT

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MajorPlayers(3/8)
Player BusinessDescription Itprovidesawiderangeofentertainmentservices Itoffersavarietyofgamesviathemobileplatforms Itprovidesitsproductsandservicesinover19companies,coveringover17countriesor regions Itdevelopsanddistributeswirelessgamesandotherentertainmentapplicationsacrossa rangeofplatformswhichincludeSMS,WAPoverGPRS,BREWandJava f l tf hi h i l d SMS WAP GPRS BREW d J Itsportfolioisbasedonoriginalcontentaswellasjointdevelopmentwithcontentpartners Thecompanywasfoundedin2000andisbasedinBeijing,China Hurray! Holding is online distributor of music and musicrelated products such as ringtones Hurray!Holdingisonlinedistributorofmusicandmusic relatedproductssuchasringtones, ringbacktones,andtruetonestomobileusersinChina ThecompanyprimarilyoperatesinChina,HonkKongandtheUS ItisheadquarteredinBeijingandemploysaround471people It merged with webbased online video portal Ku6 Holding Limited in Nov 2009 Itmergedwithweb basedonlinevideoportalKu6HoldingLimitedinNov2009 Financials: ItrecordedrevenuesofUSD54mnandanoperatinglossofUSD8.3mninthe2008

DigitalRed

Enorbus Technologies

Hurray!Holding Hurray! Holding

Note:Thislistisnotexhaustive MOBILEVALUEADDEDSERVICES CHINA.PPT

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MajorPlayers(4/8)
Player BusinessDescription TheCompanydeliverswirelessvalueaddedservicestoconsumersinChinathroughmultiple technologyplatformswhichincludeWAP,MMS,JAVATM,SMS,interactivevoiceresponse andcolorringbacktone and color ring back tone HeadquarteredinBeijingitoperates3wirelessInternetsites,Kong.net,Ko.cn&cn.NBA.com Italsodesignsandoperatesmobilegames,includingmobileonlinegames,downloadable offlinegamesandWAPgames ItacquiredShanghaiDachengNetworkTechnologyaleadingdeveloperofthree dimensional It acquired Shanghai Dacheng Network Technology a leading developer of threedimensional (3D)massivelymultiplayeronlineroleplayinggamesinDecember2009 Financials: ThecompanyreportedatotalincomeofUSD97mnandanoperatinglossof24.7mnin2008 IthasofficesinBeijingandShanghai,itemploysaround299people j g g , p y p p Itprovidesentertainmentorientedvalueaddedservicestomobilephoneusersoverthe2G and2.5GmobiletelecommunicationsnetworksinChina Itisintheprocessofcommerciallylaunching3Gservicesforwhichithasreceivedapproval fromChinesegovernmentinJanuary2009 Itprovidesringtones,iconsandscreensavers,interactiveSMS,MMS,WAP,IVRS,gamesetc. ThecompanyprimarilyoperatesinChinaandHongKong Financials: ItrecordednetrevenuesofUSD64.5mn andanetlossofUSD16.5mn in2008

Kongzhong

Linktone

Note:Thislistisnotexhaustive MOBILEVALUEADDEDSERVICES CHINA.PPT

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MajorPlayers(5/8)
Player BusinessDescription MagusSoft.developingandpublishesmobilegamesandentertainmentapplications ItoperatesinChina,Japan,andSouthernAsia It was founded in 2001 and is based in Beijing China Itwasfoundedin2001andisbasedinBeijing,China ItisheadquarteredinShanghaiwithmajorofficesinBeijing,GuangzhouandChengdu Itcommercializedthefirstwirelessstocktradingsystemandmobileinformationserviceswith ChinaTelecomin1998 ItdevelopedmobileapplicationsservicesusingWAPforinformationbrowsing,MMS,IVRS d l d bil li i i i f i f i b i S S andaseriesofmultiusergamesforKjavaenabledhandsets IthasitsheadquartersinChaoyangDistrictofBeijing ItisplanningtoexpanditsbusinessinJapanandRussia Establishedin2005asanindependentWAPportal,itofferednews,wirelessemailMomail, networkingandchatting,virtualcommunityandwirelessmusicservices ItoffersChineselanguagecontentandservicesintermsofonlinegames,Internetportaland wirelessvalueaddedservicesbusinesses ThecompanyrunsitsownInternetsearchengine,Yodao ThecompanyhaseightsubsidiariesacrossChinaandHongKong Financials: ItrecordedrevenuesofUSD444.6mnandanetprofitofUSD230.2mnin2008

MagusSoft

MToneWireless

MOABC

Netease

Note:Thislistisnotexhaustive MOBILEVALUEADDEDSERVICES CHINA.PPT

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MajorPlayers(6/8)
Player BusinessDescription PacificNetdevelopsandprovidesgamingtechnologyforthegameoperators;andprovides softwareoutsourcingservicesandtelecomvalueaddedservices I ItoperatesinMacau,HongKong,China,Philippines,andtheUS i M H K Chi Phili i d h US ItsMVASportfolioincludesIVRS,SMS,MMS,WAP&games Financials ItrecordedrevenuesofUSD19mnandanoperatinglossofUSD16.4mnin2007 Real'sservicesarecurrentlyavailablethrough80differentmobileoperatorsin42countries worldwide,inChinaithasapartnershipwithChinaUnicom ItlauncheditsemoticonSMSserviceforChinaUnicom'smobilesubscribersin2008 Thisnew,advancedversionofemoticonSMS brandedasxPressiveMMSbyChinaUnicom incorporatesgraphicsandphotosintotextmessages,convertinganSMSmessageintoan MMSmessageautomatically,makingplainSMSmorefunandpersonalized ItforgedapartnershipwithSichuanTelecominFebruary2009,asubsidiaryofChinaTelecom formobileInformationPushPortal(MIPP)ServicetoSichuanTelecom'ssubscribers
Th Theserviceallowssubscriberstoaccessnews,entertainment,weather,sports&informationonfinance i ll b ib t t t i t th t &i f ti fi

Pacificnet

RealNetworks

Note:Thislistisnotexhaustive MOBILEVALUEADDEDSERVICES CHINA.PPT

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MajorPlayers(7/8)
Player BusinessDescription ThecompanyhasitsheadquartersatShanghai ItsservicesareofferedbySina.com,SinaMobile,SinaCommunity,Sina.netandSinaE Commerce Italsofocusesonpartnershipswiththeleadingcompaniesinprovidingmobilevalueadded servicessuchasTCL,NEC,LG,Samsung,SonyEricsson,NokiaandCNC ItservesarangeofkeyclientslikeIBM,Microsoft,Nike,Dell,LenovoandBenQandothers I MVAS ItsMVASservicesareaccessiblewithvariousplatformssuchasSMS,MMS,WAP,IVR,CRBT i ibl i h i l f h SMS MMS WAP IVR CRBT andKJAVA/BREW Financials: ItreportedanetrevenueofUSD370mnandanetincomeofUSD80.6mnin2008 ItisbasedinBeijing ItswirelesssegmentoperatesasaserviceprovidertoChina'sleadingmobilenetwork operators,offeringarangeofwirelessproductsfocusedonentertainment,informationand communications Itsproductsaremadeavailabletoendusersviaabroadchoiceoftechnologies,suchasSMS, d d l bl d b d h f h l h WAP,MMS,RBTandIVRservices Financials: ItreportedrevenuesofUSD429.1mnandanoperatingprofitwasUSD163.8mnin2008

SINACorporation

Sohu

Note:Thislistisnotexhaustive MOBILEVALUEADDEDSERVICES CHINA.PPT

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MajorPlayers(8/8)
Player BusinessDescription TencentisheadquarteredatShenzhen ItsresearchinstitutesarelocatedinBeijing,Shanghai,andShenzhen TencentsalsooperatesInternetportalssuchasQQ,QQ.com,QQGames,andPaiPai.com ItsIMplatform,underQQbrand,allowsuserstocommunicateinrealtimeacrossInternet, andmobileandfixedlinetelecommunicationsnetworksusingvariousterminaldevices Financials: I ItreportedrevenuesofUSD1bnandaprofitofUSD412.3mnin2008 d f USD 1 b d fi f USD 412 3 i 2008 TomOnline,asubsidiaryofTomGroup,isawirelessInternetservicesprovider ItprovidesMMS,SMSandonlineadvertisingservices ItisheadquarteredinBeijing TomOnlineprovidesmessagingservices,downloadablenewsheadlines,sportsinformation, games,andringtonesthroughitswirelessoperations Userscanpayforservicesthroughamonthlysubscriptionfeeoronapermessagebasis Financials: ThegrouprecordedrevenuesofUSD350.4mnandanetlossofUSD179.1mnin2008

TencentHoldings

TomOnline

Note:Thislistisnotexhaustive MOBILEVALUEADDEDSERVICES CHINA.PPT

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Introduction Introduction ValueChainandServices MarketEntryProcedure Market Entry Procedure GovernmentRegulations MarketOverview Drivers&Challenges Competition KeyDevelopments y p
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KeyDevelopments
Date 21Dec2009 09Dec2009 09 D 2009 30Nov2009 02July2008 17May2008 06 Feb 2008 06Feb2008 Development Sohu.comInc.anditssubsidiaryChinaRenareintroducingmicrobloggingservice,anewkindofsocial networkingservice ChinaTelecomlaunchedanIMservice,TianyiLive,incooperationwithMSN.Itisdesignedtotransmit Chi l l h d i i i i i i ih S i d i d i SMSbetweendifferentnetworksandofflinemessages Threeinvestmentfirms,includingSequoiaCapital,planoninvestingUSD180mninSinaCorp Hurray!announceditsentryintheentertainmentindustrybyintroducingitsnewartistmanagement y y y y g g service,whichaimsatattractingseveralChinesewellknownartists SinaCorporationlauncheditsEnglishnewssiteinordertoprovidetimelynewsrelatedtoChinaaswell asothercontentservicesinEnglish PacificNethasforgedaStrategicAllianceAgreementwithMobileGameProviderSpin3 PacificNet has forged a Strategic Alliance Agreement with Mobile Game Provider Spin3

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