Top online companies form trust alliance
By Wang Ying (China Daily)
Updated: 2004-11-30 10:00

The Internet Trust Alliance, co-established by China's top Internet companies Sina, Sohu and Netease, proclaimed self-disciplinary regulations for China's Internet wireless service providers (SPs), yesterday in Beijing.

The move was taken after the Ministry of Information Industry took strict regulatory measures to eliminate pornographic content and unreasonable charges, which have reined in the rapid growth of the short message service (SMS) sector, as shown in the Internet companies' financial reports.

The new self-discipline regulations highlight a transparent charging system, and legal information content with no pornographic implications.

The Internet alliance will make a quarterly evaluation on the Internet service providers' (SPs') performance and award a qualified service a CTWS (Client Trusted Wireless Service) certification for compliance.

Sohu CEO Zhang Chaoyang said: "We will put continued and serious efforts into the establishment of a new CTWS brand, and with the tremendous combined influence of Sina, Sohu and Netease, a healthy and orderly environment for China's Internet wireless service development will soon be created."

Touching upon Sohu's losses in wireless service because of what it termed "strict governmental regulation," Zhang said that his company was aiming at long-term benefits and a short-term slowdown in wireless service would not curb the company's overall development as he's satisfied with Sohu's 2004 performance.

"Sohu, Sina and Netease, originally competitors in the Internet industry," Ding Lei, CEO of Netease said, "are now standing together to regulate performance and co-operate to guarantee a trusted service to our clients. And, along with the wireless service industry's development, more content will be added to the self-discipline regulations, which will bolster the industry's sustainable growth and may also provide valuable experience for other industries."

Before the government's strict regulations on the Internet SPs' operations, many Internet users often complained about spreading pornographic information through the Internet short message service (SMS), and "subscription pitfalls" where they would be charged several dollars a month if clicking the wrong button by mistake or submitting a default selection designed by the SPs, according to industry sources.

In order to improve the SMS market, the Ministry of Information Industry, therefore, launched a campaign to check up on China's Internet service providers starting from July this year.

Many of China's Internet companies, including Sohu and Sina, were punished by suspension of some of their wireless service due to violations of the regulations.

Internet companies involved in wireless service, consequently, suffered from a revenue decline in their wireless service business. Sina's SMS third quarter revenue dropped by 6.6 per cent compared to the previous quarter, Sohu's wireless service by 30 per cent and Netease's wireless related service by 16.4 per cent.

The tripartite Internet alliance among Sina, Sohu and Netease, was formed in September.

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