China's SMS Website Joint Information Center, which was launched two weeks ago, symbolizes a formal cooperation between China Mobile and China Unicom in the SMS sector. However there are still issues to be resolved.
Analysts in local media say the main reason behind their cooperation is that neither of them wants to lose the huge profit potential of the SMS market. Despite the huge amount of short messages sent in China each year, most of the messages are between individuals, and so wireless value-added companies like Hurray (HRAY), Tom.com (TOMO), Linktone (LTON), and KongZhong (KONG) do not see any revenues from that type of mesaging. However China Unicom and China Mobile do earn proceeds from those messages.
In order to further realize the large market potential to increase revenue for these messages, analysts say both China Mobile and China Unicom need to open themselves to more cooperation to build a uniform address search standard and data source center. However knowing their past squabbles and fights over CDMA and GSM, it will be difficult for the companies to fully open themselves to each other.