Chinese wireless Internet service provider Tom Online Inc maintained a high growth in both revenues and profits in the second quarter, beating the market's worries about slow growth in wireless value-added services.

Tom Online said yesterday in Hong Kong that its revenues in the past quarter rose 19% over the first three months of this year to US$30.88 million, while net profits set another record to US$10.06 million. Tom Online's stocks closed at HK$1.34 (17 US cents) yesterday, down 1.47%, before announcing results. The result was the first positive financial report after another Chinese Internet company Inc reported a possible drop in its wireless value-added services earlier this month.

Netease, also listed on the NASDAQ, issued a warning on July 8 that the revenues of its mobile value-added services including short messaging service (SMS), multimedia messaging service (MMS), wireless Internet protocol (WAP), and interactive voice response, might drop by 37 to 41% quarter-on-quarter in the April-June period. The company is expected to announce its result on August 2.

Netease attributed the fall of its wireless businesses mainly to intensifying competition and tightened regulations by the Chinese Government and mobile operators on content and billing schemes. However, Tom Online said the wireless value-added services based on the 2.5 generation mobile communications network, which has higher speeds of connection and emphasizes data services, interactive voice response (IVR), WAP or wireless Internet, online advertising were the major growth engines. The wireless service revenues, mainly including SMS, MMS, WAP, IVR, contributed 93% of Tom Online's total and grew by 21% over the previous quarter. SMS, the text messaging service of mobile phone users and the biggest product line for Tom Online, increased by 3% over the previous quarter.


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