Rumor: China Mobile to Purge SPs from Knockoff Phones

Tencent Tech, 3/25/10

According to an informed source, in response to the March 15 CCTV expose on China's illegal cooperation between SPs and handset vendors, China Mobile (NYSE: CHL; 0941.HK) has made an internal decision to require wireless value-added service providers (SPs) to, within a certain time period (tentatively set at 3 months), withdraw their services from knock-off and gray market import phones that do not have a valid network access permit, or else face having their services terminated. This announcement will soon be sent to hundreds of domestic service providers. In addition, two services, one that will automatically notify users when they subscribe to a value-added service, and a centralized "0000" value-added service inquiry and cancellation service, will be officially released on July 1.

Editor's Note: For more background on the illegal SP-vendor cooperation, see " CCTV Targets Handset Vendors and SPs in Expose," MD 3/16/10 issue.

Keywords: regulation China Mobile handset illegal wireless network access permit SP CHL 0941.HK shanzhai WVAS black market

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