Lancaster, UK-based mobile content provider Monstermob has announced it expects it's 2006 profits to be lower than those from 2005, although it also expects a recovery based on new content types in 2007. Shares in Monstermob fell as much as 18% after the announcement, which the company blamed on changes to UK mobile content regulatory controls last September.

"I think it (the share fall) is a slight overreaction to the UK news. With this kind of company any negative news whatsoever and it will be Hammered but the UK business is probably less than 20 percent of sales," Conor O'Shea, an analyst at Teather & Greenwood, told Reuters.

In September, telecoms regulator Ofcom introduced regulations to restrict subscription services for ringtones and games after complaints that children were being duped into signing up for expensive subscription deals.

Consumers who thought they were buying a single ringtone were in fact signing up to a subscription plan. Each week they would receive a new text message for which they were charged 3 pounds ($5.24), enabling them to download another ringtone.

Monstermob said the market had been adversely affected by the behaviour of certain competitors, resulting in loss of confidence in the integrity of subscription services, making acquisition and retention of subscribers more difficult.

"I think the market may be making the connection that what will happen in the UK today will happen overseas tomorrow. I think that is not necessarily the case," O'Shea said.

The company operates in around 25 countries and employes for than 500 people worldwide. The company has recently made a number of major acquisitions in emerging markets, and is currently investing in next-generation services, all of which the company says have contributed to the decline in profit for 2006.