Question-and-Answer Session
Operator
Your first question comes from Alicia Yapp - Citigroup.
Alicia Yapp - Citigroup
Yes, good morning. I have two questions. First of all, can you please update us on the overall regulatory environment? Specifically, will Q4 continue to be impacted by the change of the China Unicom policy? Can you help us understand the seriousness of the impact on your business as well as your peers?
Sean Wang
The regulatory environment as we see it continues to be quite tight, and the change in China Unicom’s revenue confirmation policy had a very significant impact on our business. For Q3, because of the change in this policy and compared to the quarter before, no such change. As a result, our revenue from China Unicom decreased by $1.3 million, so that’s a huge hit on us just because of the change in policy. We expect this new policy will be staying even until Q4, and we’re not so sure about next year. But for Q4, this new policy will still be there.
QD Wang
We do believe actually, this policy will have the same impact to our peers in this market. Looking forward, Q4 like Sean say, the business will be impacted for such a policy. Looking forward starting from next year, we expect the WVAS environment will improve gradually quarter after quarter, and service providers working some front to grow their revenue gradually starting from next year.
Alicia Yapp - Citigroup
Can you just give us your Q4 guidance, it already included the impact from China Unicom?
Sean Wang
Right, and Q4 guidance we already factored in the impact from this change in China Unicom’s revenue confirmation policy.
Alicia Yapp - Citigroup
My second question is regarding your announcement on the merger. Could you tell us the trailing revenue run rate for Enlight Media and what expectations should we expect for 2007 and 2008? Thank you.
QD Wang
Actually we are working on their numbers in ?07 with Deloitte as the auditing company right now. Also we are on working on the guidance for ?08 and we probably will have the auditors and more updated numbers available but we don’t think we can talk specific numbers on this phone call.
Alicia Yapp - Citigroup
What about the historical trailing revenue run rate?
Sean Wang
Enlight has been a very profitable company and they of course, they had their share of ups and downs but the company has been profitable for the past four or five years. Especially the company was doing extremely well in 2003, 2004 and also recently they have been doing quite well. I think based on their past track record and their performance, we feel very comfortable working with this company.
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