China Mobile, The Mobile Internet And Content Bully

Not that this is a secret: all the publicly-listed Chinese online and mobile content and application providers have seen their revenues and profits tank as a result of the uncertain and tight regulatory market in the country. WSJ has a story focused on China Mobile (HKG:0941), which controls 338 million wireless subscribers in a market with a total of about 500 million subscribers, and how its policies are squeezing out small content providers.

While CM allows its users to roam freely (with a flat fee) within its own walled garden called Monternet, it recently changed its policy and no longer allows unlimited access the outside Web. It has been sending users a message as they try to connect to sites outside the portal, telling them they will be charged for data use outside Monternet. The result is dramatically lower traffic for those sites. Those in favor of this policy say consolidating services under China Mobile’s flag will be better for mobile users in the long run, getting rid of marketers who send spam advertisements through text messaging or who sign up people for services without permission.

Insiders expect the consolidation to continue, at least until the government issues licenses for 3G services, as more mobile carriers enter the scene.

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