Analysys International, a leading Internet-based business information service provider, says that the rapid development of China’s portal websites’ WAP services will challenge the dominant position of China Mobile’s Monternet in China’s WAP service industry.
Mr. Wang Jianzhou, China Mobile’s President, says that Monternet has reached the turning point after years of development. The existing business model is to operate all services on China Mobile’s platform, which has enabled operators to control the copyright form the source. But the development of WAP2.0 has provided much content to be downloaded free from the Internet, which will inevitably have an impact on their operating model. He says China Mobile will not enter the market for content providing and will continue to cooperate with CPs and SPs. China Mobile’s current principle is to maintain balance between supervision and development.
Lately, China’s portal websites, including Sina and Sohu, increased their investments on WAP websites, showing that WAP has become one of their future development focuses. Their strategy to enter the WAP service market is to attract visits from users by providing contents like news and relative information. The increasing visit volume of free WAP websites has attracted China Mobile’s attention. President Wang’s words showed that China Mobile will still adopt the semi-closed operating model for Monternet. They will surely strengthen regulations on the free WAP websites to maintain Monternet’s dominant position.
According to Analysys International’s Awtach-Mobile VAS Service, China Mobile’s strategy to strengthen regulations on free WAP services will increase the entry barrier of WAP service industry, and drive more WAP resources to concentrate on Monternet and eventually lead to their industry monopoly. However, things would not necessarily go the way China Mobile wants. As the WAP industry matures and develops, Internet based portal websites will challenge Monternet’s monopoly by leveraging market tools and propel the industry into an open developing model. Also, the interconnection between WAP and the Internet will also challenge Monternet’s monopoly.
Analysys International thinks that many market factors, including the rising of portal websites and the interconnection between WAP and the Internet, will inevitably challenge Monternet’s monopoly position. China Mobile cannot change the potential industry development demand simply by regulatory movements. Therefore, changing operation ideology and innovate business model should be critical for China Mobile to achieve the strategic transition for Monternet.