If KONG’s SMS revenue expected to be lowered by 20%-25%, then I assume LTON will have the same impact and 80% of 7.4M of 3Q’s SMS revenue should be around 5.9M for 4Q09 SMS revenue. Everything else should be constant or even better due to holiday seasons in 4Q. Total revenue should be around 12.3M plus interest income 650K, if KONG’s projection is correct we should still have another profitable quarter.
KONG’s PR Summary - Under the guidance of China Mobile, wireless value added services (WVAS) that are embedded in handsets will be required to introduce additional notices and confirmations to end-consumers during the purchase of such services. These new policy changes are expected to potentially significantly reduce the number of service providers in the market in the coming months, which may benefit more established service providers, such as the Company, over the longer term.
LTON and KONG should have enough resources and technical skills to adopt the changes, which may benefit the future.