Editorial Summary

The Ministry of Industry and Information (MII) released new regulations regarding SMS spam on Wednesday. Under the new rules, five types of SMS spam including advertising, business and wireless value-added service provider information will be illegal to send without consent. The government regulator intends to begin company inspections on July 1 to ensure compliance.

China's crackdown on SMS spam started earlier in the year when China Central Television (CCTV) attributed eighty percent of the nation's texted spam to Chinese out-of-home advertiser Focus Media Holding Limited (Nasdaq: FMCN). Focus Media recently announced in its first quarter report that the company had discontinued mobile advertising operations. Focus recorded a net loss of $53.8 million for the quarter including a $79.3 million impairment charge for its mobile advertising restructure. The company has lowered full year 2008 guidance by $40 million, to between $820 million and $850 million, due to the discontinuation of wireless advertising and earthquake losses.