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Premium services code drags down MobileActive profit

Premium services code drags down MobileActive profit

Mobile entertainment and service provider MobileActive (ASX:MBA) saw its net profit fall 45.9% to $110,000 in 1H10, due to the introduction new regulatory requirements for mobile premium services.

The company said that the new Mobile Premium Services Code, which MobileActive helped co-develop, had increased compliance costs by $170,000.

The new double opt-in requirement has meanwhile weakened customer conversion, MobileActive said.

On the bright side, the self-regulatory code has lowered customer complaints about premium services to the Telecommunications Industry Ombudsman (TIO) by 63%, the company said.

MobileActive added that it was working on a number of mitigation strategies for the extra costs and lower take-up rate, and was continuing to diversify its operations into new product areas.

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Tags regulationmobile marketingmobile servicesMobileActivefinancial results

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