China Mobile (CHL) has released a notice asking all short message service providers of Monternet to sign a separate agreement with provincial branches, instead of itself.
It is expected that the agreements will all be signed by March 2005.
China Mobile says the change was made to "transfer rights from the 'central' to the 'local'" so as to facilitate better management and reduce the complaints from users.
But it also adds that in doing so, the cost for mid-sized and smaller service providers will be increased. China Mobile says the minimum registration capital for these service providers should be CNY30 million, which has caused great anxiety among the service providers and means a lot of them might be washed out for not being able to reach the required standard.