Sina Corporation (Nasdaq: SINA) today announced that it has received a notice of sanction from China Mobile Communication Corporation (CMCC).
The notice alleged that 27 wireless value-added service providers had violated CMCC rules and as a result, CMCC is imposing sanctions and penalties on these providers. In this notice, Sina was cited for inappropriate content and unauthorized expansion of dialing numbers for its IVR services. For these infractions, Sina's main IVR service number shall continue to be suspended pending further study by CMCC on Sina's proposed modifications of its IVR service. At the end of July, CMCC informed the Company that its main IVR service number had been temporarily suspended pending investigation. Substantially all Sina's IVR service revenues had been generated from its main IVR service number that is being suspended. For the quarter ended June 30, 2004, revenues from IVR service accounted for approximately 7% of Sina's wireless value-added service revenues and 4% of its total revenues.
As part of the sanctions contained in this notice, CMCC also suspended approval for all of Sina's new applications for products and services on existing platforms for 3 months and Sina's applications for products and services on new platforms for 6 months effective August 15th, 2004. Meanwhile, the Company will continue to offer its existing wireless VAS products and services on existing platforms with CMCC, including SMS, MMS, WAP, KJAVA, Ring-Back-Tone, etc.