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Australian telecoms giant Telstra plans to boost its presence in the Chinese mainland, possibly using its newly merged business unit in Hong Kong as a springboard, due to increasing activities from foreign telecom operators.

Brian Pilbeam, president of Telstra Asia, told China Daily that Telstra has been watching the Chinese mainland market, the world's largest telecom market, for a long time, but the acquisition of a mobile operator in Hong Kong could accelerate its involvement.

Telstra announced on December 9 it had merged its Hong Kong arm CSL with New World PCS Ltd to form CSL New World Mobility Ltd, which became the largest mobile operation in the special administrative region.

The Australian giant holds more than 75 percent in the new firm and plans to grow it "aggressively" with its third generation (3G) mobile system.

"If we invest in the Chinese mainland, we believe CSL New World Mobility will be a good platform," said Pilbeam.

Telstra's presence in the Chinese mainland is minimal, as the World Trade Organization does not have any requirement for China to open its basic telecom services.

In the value-added service areas, foreign capital is allowed, but domestic operators and foreign partners usually have difficulties as both parties want to control the joint ventures.

AT&T and South Korean firm SK have two joint ventures with Chinese partners, but progress has been very slow.

However, the Chinese mainland, with more than 750 million fixed-line and mobile subscribers by the end of November, attracts attention from almost every major telecom company in the world, but is also seeking different ways to share growth.

In November, the Spanish carrier Telefonica became the sole partner of China Netcom in the Chinese mainland and has the rights to boost its stakes in the Chinese fixed-line operator from the current 5 percent to 9.9 percent.

France Telecom also formed an alliance with the Chinese telecom equipment company ZTE on research and development in early December, after setting up a research centre in Beijing last year.

Telstra, which is also intent on developing business in China, was assigned to be a consultant on telecommunications services to the Beijing Olympic 2008, but does not have any other real activities in the Chinese mainland.

Pilbeam said his firm aims to have a cooperation model of consultant and partner with the Chinese side, while the Hong Kong venture plays an active role.

He believed Telstra has the expertise in both the Olympics and 3G, both of which China needs.

The Chinese Government is still evaluating the date of the 3G launch, but it is widely believed to be next year, as any later and it would not be able to provide 3G services during the Beijing Olympics 2008.

However, Pilbeam added: "another principle of the company is that cooperation must be profitable and based on mutual benefits."

Some early-comers were anxious to enter the Chinese market and build a good relationship with Chinese partners, so while they did not have high priority for profits, they are still now having difficulties.

(China Daily December 30, 2005)