Norson China Market Series: Mobile Value-added Service Providers Review & Outlook, 2004-2005

This publication has been discontinued on July 19, 2011.

Introduction

Abstract

2004 was a critical year for Chinas mobile value-added services (MVAS) market. Prior to 2004, the market was allowed to grow without much operator or government interference. This relaxed atmosphere led to the emergence of thousands of MVAS service providers (SPs), most of which provided SMS-based services. In 2004, growing user complaints of illegal business practices led operators to crack down on SPs, denting the sectors rapid growth.

Today SMS services continue to dominate what has become a sizable MVAS market, and 2.5G services such as WAP and ringback tones are becoming new growth points as SMS growth slows. Operators are exerting increasing control over the industry value chain, and leading SPs have clearly stepped forth from the pack. This Norson report analyzes how industry restructuring and reorganization, advances in network technology and handsets, and increased cooperation between operators and service providers in 2004 has created a market environment that will foster steady growth for the MVAS industry in 2005 and beyond.

Norson analyzes SMS, MMS, Cai E, WAP, JAVA, BREW, IVR and ringback tone services offered by China Mobile and China Unicom. Norson also provides company profiles for seven of the top MVAS service providers -- Netease, Sina, Sohu, TOM, Kongzhong, Linktone, and Tencent.

Table of Contents

Executive Summary 1

2004: A Year of Reorganization & Restructuring in Chinas MVAS Market 3

• China Mobile 3
• China Unicom 4

Overview of Chinas MVAS Market in 2004 6

China Operator MVAS Performance in 2004 8

• China Mobile MVAS Performance in 2004 8
• China Unicom MVAS Performance in 2004 10
• China SP-Operator Revenue Sharing Plans 15

China SP MVAS Performance in 2004 16

• China SMS SP Performance in 2004 18
• SMS SPs and China Mobile 20
• SMS SPs and China Unicom 21
• MMS/Cai E SP Performance in 2004 22
• MMS SPs and China Mobile 24
• WAP SP Performance in 2004 25
• WAP SPs and China Mobile 27
• WAP SPs and China Unicom 28
• JAVA/BREW SP Performance in 2004 29
• JAVA SPs and China Mobile 31
• BREW SPs and China Unicom 32
• IVR SP Performance in 2004 33
• IVR SPs and China Mobile 35
• Ringback Tone SP Performance in 2004 36
• Ringback Tone SPs and China Mobile 38
• Ringback Tone SPs and China Unicom 38

China MVAS Service Provider Profiles 39

• Netease 40
• Sina 41
• Sohu 42
• TOM Online 43
• Kongzhong 44
• Linktone 45
• Tencent 46

China MVAS Market Forecasts, 2005-2007 47

Appendices 50

• Operator User Numbers 50
• Technology Definitions 53

List of Figures

• Figure 3-1: China MVAS Users by Service, 2004 (M) 6
• Figure 3-2: China MVAS Revenue by Service, 2004 (USD M) 7
• Figure 4-1: China Mobile Data Value-Added Service Users, 2004 (M) 8
• Figure 4-2: China Mobile Voice Value-Added Service Users, 2004 (M) 9
• Figure 4-3: China Mobile Data Value-Added Service Revenue, 2004 (USD M) 9
• Figure 4-4: China Mobile Voice Value-Added Service Revenue, 2004 (USD M) 10
• Figure 4-5: China Unicom Data Value-Added Service Users, 2004 (M) 11
• Figure 4-6: China Unicom Voice Value-Added Service Users, 2004 (M) 12
• Figure 4-7: China Unicom Data Value-Added Service Revenue, 2004 (USD M) 13
• Figure 4-8: China Unicom Voice Value-Added Service Revenue, 2004 (USD M) 14
• Figure 4-9: China SP-Operator Revenue Sharing Ratios, 2004 (%) 15
• Figure 5-1: China MVAS Product Lifecycle Snapshot, as of 1Q 2005 16
• Figure 5-2: China SP MVAS Revenue, 2004 (USD M) 17
• Figure 5-3: China SMS Users and User Penetration Rate, 2003-2005 (M) 18
• Figure 5-4: China SP SMS Revenue, 2002-2005 (USD M) 19
• Figure 5-5: China Mobile SMS SP Market Share, 2004 (%) 20
• Figure 5-6: China Unicom SMS SP Market Share, 2004 (%) 21
• Figure 5-7: China MMS & Cai E Users and User Penetration Rate, 2003-2005 (M) 22
• Figure 5-8: MMS & Cai E SP Revenue, 2003-2005 (USD M) 23
• Figure 5-9: China Mobile MMS SP Market Share, 2004 (%) 24
• Figure 5-10: China WAP Users and User Penetration Rate, 2003-2005 (M) 25
• Figure 5-11: China WAP SP Revenue, 2003-2005 (USD M) 26
• Figure 5-12: China Mobile WAP SP Market Share, 2004 (%) 27
• Figure 5-13: China Unicom WAP SP Market Share, 2004 (%) 28
• Figure 5-14: China JAVA & BREW Users and User Penetration Rate, 2003-2005 (M) 29
• Figure 5-15: China SP JAVA & BREW Revenue, 2003-2005 (USD M) 30
• Figure 5-16: China Mobile JAVA SP Market Share, 2004 (%) 31
• Figure 5-17: China Unicom BREW SP Market Share, 2004 (%) 32
• Figure 5-18: China IVR Users and User Penetration Rate, 2003-2005 (M) 33
• Figure 5-19: China IVR SP Revenue, 2003-2005 (USD M) 34
• Figure 5-20: China Mobile IVR SP Market Share, 2004 (%) 35
• Figure 5-21: China Ringback Tone Users and User Penetration Rate, 2003-2005 (M) 36
• Figure 5-22: China SP Ringback Tone Revenue, 2003-2005 (USD M) 37
• Figure 5-23: China Mobile Ringback Tone SP Market Share, 2004 (%) 38
• Figure 6-1: NetEase Quarterly MVAS Revenue, 2004 (USD M) 40
• Figure 6-2: Sina Quarterly MVAS Revenue, 2004 (USD M) 41
• Figure 6-3: Sohu Quarterly MVAS Revenue, 2004 (USD M) 42
• Figure 6-4: TOM Online Quarterly MVAS Revenue, 2004 (USD M) 43
• Figure 6-5: Kongzhong Quarterly MVAS Revenue, 2004 (USD M) 44
• Figure 6-6: Linktone Quarterly MVAS Revenue, 2004 (USD M) 45
• Figure 6-7: Tencent Quarterly MVAS Revenue, 2004 (USD M) 46
• Figure 7-1: Forecast of China MVAS Users, 2005-2007 (M) 47
• Figure 7-2: Forecast of China MVAS Revenue, 2005-2007 (USD B) 48
• Figure 9-1: China Mobile Quarterly User Growth, 2003-2004 (M) 50
• Figure 9-2: China Unicom Quarterly CDMA User Growth, 2003-2004 (M) 51
• Figure 9-3: China Unicom Quarterly GSM User Growth, 2003-2004 (M) 52

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