I am often still asked, rhetorically I imagine, if I believe the wireless value-added service sector in China has good short-term prospects. My answer is still, "No. Absolutely not."

     Being a mobile value-added services provider, which usually means you provide news, games, or features on SMS, MMS, WAP, or IVR, means you gain nothing in China. Do the math. When you are a MVAS or WVAS firm, you still give a large percentage of your revenue over to others, like China Mobile. A few years ago, a content provider could walk away with a meager 10-20%, even though they did all the work. Now that figure has supposedly risen to as much as 40-50%. But that still means that you need to send millions and millions of messages to make decent money.

     But then you say, "But I heard that there are billions of SMS messages sent in China, so making money should be easy!" This is true. However little of this money goes through mobile value-added service providers' pockets. Why? Well, according to Xinhua News Agency, let's look at these figures they posed for the Spring Festival holiday in 2006:

     "China Mobile and China Unicom, the country's two major mobile service providers, users have sent about 12 billion greeting cellphone messages during the Spring Festival holiday. Every mobile phone user sent 30 messages on the average from January 28 to February 4, according to sources from the two companies. Calculating on the basis of 0.1 yuan (1.25 US cents) per short message, China Mobile raked in 950 million yuan (US$118.8 million) from this service, while China Unicom generated 310 million yuan (US$38.8 million). China Mobile alone sent 1.9 billion messages on January 28, or the eve of the Spring Festival, while China Unicom sent 1.4 billion on January 28-29. China Mobile alone sent 1.9 billion messages on January 28, or the eve of the Spring Festival, while China Unicom sent 1.4 billion on January 28-29."