Question-and-Answer Session
Operator
(Operator Instructions)
The first question comes from Tian Hou with Unterberg Tobin.
Tian Hou - Unterberg Tobin
I have a couple of questions. The first one is how much more capital outflow do you expect to happen in Q2, Q3, Q4? Then I will ask the second question.
Colin Sung
The net cash outflow for the coming quarters, we are expecting to be around $3 million to $4 million.
Tian Hou - Unterberg Tobin
Okay, so for the next three quarters, each quarter I should expect $3 million to $4 million?
Colin Sung
$3 million to $4 million net cash outflow.
Tian Hou - Unterberg Tobin
Each quarter, right?
Colin Sung
Yes, in Q2 and Q3.
Tian Hou - Unterberg Tobin
Okay. The second question will be gross margin; is it possible for you to break down the wireless and advertising?
Colin Sung
Yes, the WVAS in the region, around 55% to 60% for WVAS. The advertising services revenue, due to the initial investment and costs up-front, we spent in the near quarters, at least for the next few quarters, is in the range of 40% to 45%.
Tian Hou - Unterberg Tobin
Okay. So the gross margin, do you expect the second quarter, third quarter, going forward to improve gradually or stay where it is?
Colin Sung
We are expecting the gross margin will be improving over the next few quarters at a gradual pace from Q2 to Q3, and we will see a little bit more improvement by the year-end.
Tian Hou - Unterberg Tobin
Okay, that’s good. Thank you. That’s it.
Operator
Your next question comes from Ming Zhao with SIG.
Ming Zhao - Susquehanna Financial Group
Good morning. First question is if I look at your cross-media strategy, partnering with TV especially, how much of your WVAS revenue in the Q1 comes from these interactive programs?
Colin Sung
In Q1, so far the partnership we have is in the single digits as far as the percentage goes in total revenue. Again, because of the contractual agreement, we do not disclose specifics.
Ming Zhao - Susquehanna Financial Group
I guess the reason why I am asking is I understand the situation for your non-TV related revenue growth for the quarter, is it just like single digit down?
Colin Sung
In overall WVAS, yes, it is single digit down compared to Q4 of 2006, yes.
Ming Zhao - Susquehanna Financial Group
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