China Mobile Music Provider Suspends IPO
Century Weekly, 8/15/10
Chengdu-based online music provider Myoo Music Entertainment has begun allowing strategic investors to withdraw from shareholder agreements in late July. Myoo Music's partnership with China Mobile (NYSE: CHL; 0941.HK) is close to expiring and may not be renewed, suggesting that Myoo Music may postpone its planned IPO on Shenzhen's ChiNext growth enterprise board, and may not survive since its business is completely dependent on China Mobile's wireless music base.
A source close to Myoo chairman Tan Chunling told Century Weekly that Myoo and China Mobile signed a three year agreement with China Mobile, but subsequent contracts with external partners were only for one year (with the exception of Beijing-based IT solutions provider Ultrapower (300002.SZ)), and Myoo's contract is on the verge of expiration. Despite repeatedly insisting that Myoo had no ties to China Mobile deputy GM Zhang Chunjiang and Sichuan Mobile GM Li Hua, both of whom are implicated in recent scandals, Tan was unable to renew the contract in recent meetings with China Mobile in Beijing. The source said that no one at China Mobile was willing to renew the contract following the flight and subsequent arrest of Li Xiangdong, head of China Mobile's mobile music base in Sichuan.
Myoo is a designated music content operations support partner for China Mobile's national mobile music base operated by Sichuan Mobile. Myoo functions as a content aggregation provider, and all content providers seeking to cooperate with the mobile music base are required to pass through Myoo. If Myoo is removed as a go-between, all of China Mobile's relationships with music content providers will undergo major changes.
Keywords: Tan Chunling Myoo Music Entertainment Li Hua Zhang Chunjiang Sichuan Mobile China Mobile IPO wireless mobile music CHL 0941.HK Ultrapower ChiNext 300002.SZ Li Xiangdong scandal content provider
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