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Despite current lack of revenues, Chinese ISP Tencent is 'investing significantly' in mobile platforms

Highly popular, hopes business models will emerge

Despite current lack of revenues, Chinese ISP Tencent is 'investing significantly' in mobile platforms
Tencent (HKG:0700) is the largest internet service provider in China, and it's just announced half year revenues of $2 billion, up 47 percent year-on-year.

As part of its business, it has a reasonably-sized online gaming division and a tiny mobile gaming unit; although it's looking to beef that up with various platform agreements and development funds, especially with Japanese company GREE.

Less will be more?

"Our mobile value added services business increased slightly in the second quarter of 2011, reflecting the growth in mobile SNS and mobile games," it said, although not breaking out specific numbers.

One issue however has been the new service cancellation policy introduced by China Mobile in early 2011, which Tencent said had resulted in lower realisation rates and dampened revenue growth.

Investment to profit

"While we have already implemented mitigating measures, we expect the negative effect of this policy to linger in the foreseeable future," it added.

Despite this, Tencent said it will significantly increase its investment in mobile, including extending its existing internet platforms to mobile devices and developing new specific mobile services.

"Although these mobile platforms generally do not generate revenue at the moment, they are highly popular among users, and we believe business models will emerge in the future," it pointed out.

[source: Tencent IR (PDF)]
Contributing Editor

A Pocket Gamer co-founder, Jon is Contributing Editor at PG.biz which means he acts like a slightly confused uncle who's forgotten where he's left his glasses. As well as letters and cameras, he likes imaginary numbers and legumes.