Rumor: China Telecom May Terminate Some of 8 Bases
CCTIME, 6/19/12
An industry source has recently disclosed that some of China Telecom's (NYSE: CHA; 0728.HK) eight vertical service bases for the operation of core traditional and mobile internet products are now facing the possibility of being shut down or merged. Construction of the eight industry bases began in 2009, at which time China Telecom established that it would first support the bases in their early stages of operation, and later evaluate their profitability in order to decide whether to continue operations, close them down, merge them, or sell them. The company expects to begin its formal evaluation of the bases within the next six months.
To date, online and mobile video subsidiary E-Surfing Media has seen successful development, and has already been spun off into an independent company after obtaining an investment of RMB 102 mln from China Merchants Group. Other bases have developed at varying levels of success. The "I Music" Base (Guangdong) is expected to record over 100 mln individual visits to its website by the end of the year; the E-Surfing Literature Base (Zhejiang) has recorded a rapid revenue increase, and is expected to exceed RMB 150 mln this year in annual revenue from information fees; while the Animation Base (Fujian) currently has fewer than 20 mln registered users.
Editor's Note: For more background on this topic, please see "China Merchants Group Invests RMB 102 Mln in E-Surfing Video" MD 6/05/12 issue.
Keywords: online video mobile music mobile literature China Telecom Internet animation telecom mobile video registered users 0728.HK CHA mobile Internet E-Surfing Media
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