in Monstermob, the China-focussed wireless services outfit, have
accepted a bid from LaNetro Zed of Spain, which like Monstermob sells
ringtones and other so-called wireless value-added services. (WVAS).

Unlike Monstermob, LaNetro previously had no real presence in China,
so the deal should help further the global ambitions of LaNetro's
founder Javier Perez Dolset, who is looking to the rapid growth of
China and other emerging markets where Monstermob operates to counter
LaNetro's current dependence on mature European markets.

LaNetro is to pay £34m to subscribe for new shares in UK-listed
Monstermob and so gain a 54% stake. As part of the deal, Hans Snook, a
leading light of the telecoms industry, resigns as Monstermob chairman
and so too does its CEO and group finance director. Snook was chief
executive of Orange before becoming chairman of Carphone Warehouse.

When Snook joined Monstermob in 2005, investors saw the heavyweight
appointment as a vote of confidence in the fragmented and sometimes
murky WVAS industry.

The company expanded fast in China by buying smaller players and by
mid-2006, half its net revenues were coming from China. Unfortunately,
that was the moment that China's Ministry of Information Industry chose
to clean up the Wild West image of WVAS industry by clamping down on
over-eager sales tactics.

Three profit warnings later, Monstermob investors have belatedly
realised that doing business in China's new economy brings big risks as
well as rewards. The share price has collapsed 90% since the peak
reached in 2005 and Snook must be rooing the day he ever got involved
in the whole sorry affair.

As reported earlier this week by EngagingChina, Monstermob was being tentatively courted
by China's Linktone, which also operates in the WVAS market. But
Linktone did not make a firm offer and so Monstermob directors
recommended shareholders accept the earlier proposal from LaNetro.

Given the well-known problems facing China's WVAS sector, we remain
sceptical as to whether the change of ownership can solve Monstermob's
problems. Like other rivals, Monstermob was hit hard by a tightening of
the rules regarding the selling of WVAS, and the market is not going to
bounce back overnight.

Nevertheless, EngagingChina welcomes this rare attempt by a young Spanish company to make a mark in China.

More on the rule changes that led to the undoing of Monstermob in our story here.

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