China Mobile to Set up 'Mixed-Share' Company for Content Businesses
(Beijing) – China Mobile will set up a media company that includes private investment to run its content businesses, a source close to the country's largest mobile operator by number of subscribers says.
"China Mobile's content services, like music, video and games, will be branches under the management of the new company, not under its data services department anymore," the source close to China Mobile said.
China Mobile plans to invite outside investors into the new company and its subsidiaries, but wants to keep a controlling position, the source said.
The central government wants certain state-owned enterprises to invite in private and non-state investors, a reform it calls mixed-share ownership. Oil giants have also started making these changes.
China Mobile started planning the new company about six months ago, and its data services department took charge of the work, sources with knowledge of the matter said. It is recruiting employees from within to prepare for the company's opening.
The media company will cover China Mobile's five content areas – music, video, reading, games, and comics and animation – and each will be based in a different part of the country.
China Mobile's chairman, Xi Guohua, said on August 14 at a press conference to release the midyear report that his company will set up independent subsidiaries to handle over-the-top (OTT) service business.
OTT services, such as messaging app WeChat and instant messenger QQ, are provided by a third company through telecom networks.
China Mobile reported revenue of 324.7 billion yuan in the first six months of the year, 7.1 percent more than the same period of 2013, it said in the report. However, its net profit was 57.7 billion yuan, down 8.5 percent.
This was the third straight report that showed China Mobile suffering a fall in net profit. The first was in the fourth quarter of last year and the second came in the first quarter.
(Rewritten by Guo Kai)
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