The Innovative Business Model behind the Rapid Growth of SMS in China

In China, within 3 years, the wireless value-added service, especially short message service (SMS), created a brand-new and promising industry with the value of 30 billion Yuan (RMB) or US$ 3.7 billion. It also changed the fortunes of China Internet. By providing a safe, convenient and effective way of payment, mobile network helped domestic portal Web sites out of losses and achieving soaring stock prices on the NASDAQ. This economic miracle attracts global attentions. The purpose of the study is to explore the innovative business model behind this unprecedented success. Based on the SMS platform Monternet, a cooperative and well-profitable industrial chain with Chinese characteristic was established through the efficient cooperation between China Mobile Communications Corporation (China Mobile for short), the Mobile Carrier, and those Web sites serving as service providers (SP). Every participant in the value chain of China's mobile network could obtain its maximum benefits