China's new policies lower revenue projections

While details are still sketchy, China Mobile and its rival China United (China Unicom's parent company) have teamed up to take on abusive billing practices and controversial off-deck material in the Chinese mobile content industry. One of the new rules requires subscribers to confirm subscriptions a month after signing up for them, which will allow users to curtail indefinite bills for services they rarely use. Monstermob says the changes also include reminding subscribers regularly of charges, increasing free trial periods and canceling inactive subscriptions longer. Tom Online "believes the impact will be negative and significant." Sohu.com expects the rule change to lower its wireless revenues by up to $2.5 million a quarter for the rest of the year. Sina said the policy will make it more difficult for it to acquire new subscribers and will increase customer churn between content providers.

While it's understandable public companies in the mobile content space think it wise to inform investors of impending financial downturn, couching any response to the new policies with indignance would be a poor PR move. After all, the policies, as disclosed so far, seem to be safeguards for the consumer who doesn't wish to be taken advantage of. Does the success of the mobile content industry really depend on swindling idle subscribers to services they no longer wish to pay for? The longterm benefits of a loyal mobile content user should far outweigh the short-term losses. At least, that's the plan.

For more on China's new mobile content policies:
- see this article from the WSJ (sub. req.)