In response to China Mobile's announcement last week of new customer-friendly guidelines, Linktone (LTON) says the changes will
likely have a material negative impact for the company's earnings this year.
Linktone says it expects fewer new subscribers due to the double confirmations that are now mandatory before a consumer is charged for a service. Linktone also expects increasing cancellation rates by existing users due to billing reminders and required positive confirmations.
The company says increased user acquisition costs will also hinder its development for the rest of fiscal 2006.
However Linktone does say that despite the near term impact of these new policies, they will help create a more efficient and healthy industry environment which will better service the end user.