Focus Media Responds to Pricing Pressure Concerns (FMCN 3Q05 Conf Call Quotes)

Focus Media (ticker: FMCN) reported Q3 2005 earnings results yesterday. In response to a question from Citigroup's Jason Brueschke about pricing in Tier II cities Focus Media CFO Daniel Wu said the following during management's earnings conference call:

As you see for the Tier I cities, the ASP (editor: ASP is average advertising revenue per time slot per quarter) in the third quarter of 2005 actually increased by 7% to approximately $9,115 U.S. so if you see, that is partly due to the high utilization rate, also due to the price increase we put in effect on July 1st for the Tier I cities. So for Tier I cities we expect to continue to see the trend of ASP moving in the positive direction, as we have also implemented-- we have announced that we have another price increase starting from October 1st, 2005. So for the rest of the Tier II cities, as you see the ASP actually lowered, but if you look at capacity rate you can find the absolute increase of time slots are from the Tier II cities are much more from the absolute increase of time slots sold in third quarter of 2005 from Tier I cities, so because we're selling more time slots in the Tier II cities because the average selling price in Tier II cities are lower, so that's why our blended ASP actually went down in third quarter.

….overall the Tier II revenue, as percentage of total revenue is increasing…..

(Quotes are from the CCBN StreetEvents transcript.)

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