China Mobile Eyes Bigger Slice of Fetion QQ Pie

CWW, 8/12/08

China Mobile's (NYSE: CHL; 0941.HK) agreement with instant messaging and mobile communications developer Tencent (0700.HK) over the distribution of revenue from their joint Fetion QQ instant messaging product will be up at the end of the year. A source from China Mobile has stated that if everything goes smoothly, the company plans to continue the agreement, however there would definitely need to be an adjustment to the revenue sharing split, saying that "I think we will have a 50/50 split." At present, revenues are slanted 85/15 in favor of Tencent.

The same source claims China Mobile's negotiating position was weak when it signed the initial agreement, but the rapid growth of Fetion has strengthened the company. With Fetion having over 10 mln active users, China Mobile's negotiating position has strengthened considerably.

Editor';s Note: To see more background on this topic, please see "Tencent QQ Connects with China Mobile Fetion," MW 12/29/08 issue.

Keywords: mobile IM 0700.HK 0941.HK active users China Mobile CHL Fetion instant messaging QQ revenue share Tencent wireless

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