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Rumor: China Mobile to End Revenue Share with ASPire, 7/12/11

An industry source revealed recently that starting this year, ASPire Information Technologies, the company responsible for operating and supporting China Mobile's (NYSE: CHL; 0941.HK) Monternet business, will change its partnership model with the operator from a revenue share model to a payment-for-services model under which China Mobile will pay the company a flat rate of RMB 50 mln per year, with remaining revenues going to the operator. A foreign shareholder in ASPire denied reports that China Mobile intended to make foreign shareholders withdraw from ASPire Information.

China Mobile's partnerships with service providers had previously been handled through contracts with ASPire Information. For the Fetion messaging service, for instance, IT solutions provider Beijing Ultrapower Software (300002.SZ) worked with ASPire Information, which split profits from the service 50/50 with China Mobile.

A former senior manager at ASPire Information revealed that mobile papers remained the company's chief business, accounting for 80% of its services and revenues. Monthly revenues for mobile papers are near RMB 200 mln, with 60 mln subscribers paying RMB 3 per month. Content for the mobile papers comes from partnerships with various media outlets who provide content at low or no cost. Last year alone, ASPire Information had revenues of RMB 2 bln, RMB 1 bln of which it paid to China Mobile.

Keywords: foreign investment corporate restructuring mobile data China Mobile revenue wireless Aspire CHL revenue share 0941.HK users mobile paper


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