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China's Mobile IM Market Sees Steady Growth

Communications Weekly, 11/06/07

With the mobile IM market attracting more and more manufacturers, and the increasing need for interoperability and software platform upgrades, the size of the mobile IM pie is continually expanding.

Beginning last year, domestic telecom operators entered the instant messaging market one after the other. First it was China Mobile's (NYSE: CHL; 0941.HK) "Fetion", then China Unicom's (NYSE: CHU; 0762.HK; 600050.SH) "UM" and China Netcom's (NYSE: CN; 0906.HK) "Maxim". In Zhejiang, China Telecom (NYSE: CHA; 0728.HK) also introduced ECP, an IM tool for enterprise customers.

Currently there are 6 major players in the Chinese mobile IM market. China Mobile's Fetion, China Unicom's UM, China Netcom's Maxim, Tencent's Mobile QQ, MMIM Technology's PICA and Microsoft's Mobile MSN.

Regarding numbers, sources at China Mobile say that Fetion had 51 mln users at the end of August. A spokesperson for China Unicom's UM operating department didn't give precise numbers but said that the user base was growing at a rapid rate. PICA has more than 15 mln users and also has development momentum. Since its initial release in 2005, PICA has had 5 major updates and has a large feature set, including voice, group messaging, pictures, mobile blogging, personal space, enquiries, games and even video. Mobile MSN which was released in April this year, expects to see 200% growth in active users by the end of the year, and an increase of 120% in page view volume from Mobile MSN's browser. Tencent did not disclose numbers for Mobile QQ.

An industry insider who wished to remain anonymous said that just like the number of mobile Internet users, the number of mobile IM users was growing. Currently the biggest problem that needs to be solved is interoperability. After that, other key issues include fees for wireless Internet access, promotion of Internet capable mobile handsets, and cultivation of mobile users' online habits.

Keywords: China Unicom CHU 0762.HK 600050.SH China Netcom CN 0906.HK China Mobile CHL 0941.HK MMIM Tencent Microsoft UM Fetion PICA Mobile MSN QQ Mobile QQ Maxim mobile IM wireless

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