Shares of Linktone Inc. tumbled Monday after the Chinese wireless and online content provider said new rules from China's mobile network operators will hurt its 2006 results.
The Shanghai-based company's American depositary shares fell 52 cents, or 10.1 percent, to $4.62 in morning trading on the Nasdaq. Its stock had been trading between $4.89 and $11.57 in the past year.

Last week, several cell phone content companies said the new billing policies led by China Mobile Ltd., a mobile telecom company based in Hong Kong, would put a dent in their near-term profits.

Under the new rules, companies that provide services such as text messaging must offer longer free trials and bill customers monthly, rather than per-message. Service providers must also notify subscribers twice when billing changes are about to occur.

Linktone said Monday that the new rules will lead to fewer new subscribers, higher cancellation rates and an increase in user acquisition costs.

However, the company said the policies will ultimately create a healthier industry that serves customers better.

Other Chinese mobile entertainment companies also lost ground in Nasdaq's Monday morning session.

U.S.-listed shares of Tom Online Inc., which delivers multimedia products on phones and on the Web, fell 40 cents, or 2.9 percent, to $13.27.

Wireless media company KongZhong Corp.'s ADS shed 18 cents, or 2.7 percent, to $6.47, and U.S.-listed shares of Hurray Holding Co. Ltd., which sells ringtones, fell 9 cents to $5.11.

Chinese service providers with more diverse offerings were also affected Monday, despite bringing in other forms of income, like advertising, which could offset potential effects of the new rules.

Baidu.com Inc., a Chinese-language search company, saw shares drop $1.02 to $86.16 on the Nasdaq. Shares of Sina Corp., a diverse online media and mobile services company, fell 54 cents, or 2.4 percent, to $22.29.

Shares of Sohu.com Inc., which offers mobile content, online gaming and several Web portals, added 11 cents to $23.73 on the Nasdaq.

(source: yahoo)