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|Linktone Ltd., was incorporated in the Cayman Islands in November 1999. The Company provides entertainment-oriented VAS and content to mobile users over the 2G and 2.5G mobile telecommunications networks in China and Indonesia, as well as the 3G mobile telecommunications network in Indonesia. It develops, markets and distributes user wireless content and applications for access by China’s 910 million and Indonesia’s 237 million mobile phone users (as estimated at the end of 2012), mainly through three mobile network operators in China — China Mobile, China Unicom and China Telecom — and nine mobile network operators in Indonesia — PT Telekomunikasi Selular, or Telkomsel, PT Indosat Tbk, or Indosat, PT XL Axiata Tbk, or XL, PT Telekomunikasi Indonesia Tbk, PT Bakrie Telecom, PT Hutchison CP Telecommunication, PT Sampoerna Telekomunikasi Indonesia, PT Natrindo Telepon Seluler and PT Smartfren. The Company also provides certain audio-related services over the fixed and mobile line telecom networks in China and Indonesia. Its 2G SMS-based services include ringtones, icons and screen savers, interactive SMS messaging in certain television programs, adventure, action, trivia and fortune-telling games, lunar and Western horoscopes, jokes, fan clubs and event-driven or entertainment news updates. The Company also offers 2.5G services, which include MMS, such as animated cartoons and screensavers, comic strips, magazine- style ‘mobile articles’ on a variety of topics and event-driven news updates. In addition, its 2.5G, offerings include WAP services, such as WAP-based ringtones, screensavers, games and dating services, and advanced JavaTM games, or Java games. The Company also offers 3G services in Indonesia, including services such as e-paper/e-reading, music track downloads, streaming services such as video-on-demand (VOD) on tablet devices and smart TVs, and also radio streaming on mobile applications. In addition, it offers audio-related services such as ‘caller ring-back tones,’ or ‘CRBT’ which replaces the regular ringtone heard by callers with high quality music and sound effects, and IVR services, which allow users to listen to songs, jokes, stories and coverage of major events. Users can send such audio content, along with personal messages, to the mobile phones of their friends or others. The Company’s main competitors include KongZhong Corporation, as well as smaller companies such as Zhangxun and Boxun Rongtong. Other competitors include the major Internet portal operators in China, including TOM Online Inc., SINA CORP., and Sohu.com Inc.|
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