Sina Tech, 4/24/12
Industry sources recently revealed that Beijing-based Wuxian Xunqi Information Technology is planning to lay off some of its workers, because its contract with China Mobile's (NYSE: CHL; 0941.HK) 12580 information services platform will reportedly expire at the end of the year. Since a provincial branch of China Mobile no longer needs operations assistance from Wuxian Xunqi, the company will have to cut some of its staff.
Wuxian Xunqi was founded in 2006 and was responsible for the opening of China Mobile's 12580 operations. Beginning in November last year, 12580 operations were handed over to China Mobile's mobile games center in Nanjing. And starting last year, China Mobile and Wuxian Xunqi moved from a revenue sharing agreement to a model in which China Mobile simply pays Wuxian Xunqi a fixed "service fee." Wuxian Xunqi is currently negotiating service operation support with China Mobile. According to informed sources, there is a large chance that Wuxian Xunqi and China Mobile will renew the agreement, but right now both parties are negotiating on whether to sign for one or three years.
Editor's Note: For more background on this topic, please see "Rumor: China Mobile to End 12580 Contract with Wuxian Xunqi" MD 7/11/11 issue.