China Mobile keen on deals with Taiwan firms

China Mobile, the world's largest mobile carrier, aims to sign a series of deals with key Taiwanese firms this week, helping them gain access into China's rapidly growing telecoms market.

They include an agreement with smartphone maker HTC to launch at least one model in China this year -- to be called the "Ophone" -- and at least five models in 2010, China Mobile Chairman Wang Jianzhou told reporters at a news conference.

"We're working with HTC to jointly develop smartphones based on our TD-SCDMA technology," Wang said, referring to the company's homegrown 3G standard. "We'll see at least one model this year, and at least five next."

China Mobile is also working with unlisted Foxconn Group, which counts electronics giant Hon Hai and contract cellphone maker Foxconn among its subsidiaries, to jointly develop and manufacture e-books to be sold in China, Wang said.

China Mobile's overtures come amid a thaw in the traditionally frosty relations between the nations on either side of the Taiwan Strait.

In May, analysts said they expect a surge of foreign funds into Taiwan's market to continue amid the belief it will outperform global peers thanks to its growing ties to China's resilient economy.

Wang declined to give shipment targets but said the e-books should be ready for sale by the first half of next year.

The firm is also looking at a deal with Taiwan's top chip designer Mediatek to jointly develop mobile phone chipsets that can run on the company's 3G network.

"The problem we have is not the 3G network, but rather a lack of cellphones that can support it," Wang said, adding that he expects the number of 3G-capable phone models being sold by the firm to quadruple to over 200 by the middle of 2010.

"That's where we're looking for partners."

REGULATORY HICCUP

Wang's visit to Taiwan comes as China Mobile's plans to buy 12 percent of the island's third-largest telecom operator FareasTone remain shackled by local regulators, who continue to keep the sector out of bounds to Chinese investors.

The two states have been administered separately since the Nationalists fled the Chinese mainland after being defeated by the Communists in 1949, and elements of Taiwanese society remain deeply suspicious of any moves they feel may compromise the status quo.

However, Wang and FareasTone Chairman Douglas Hsu said they both remained optimistic that the deal would be eventually approved by the Taiwan authorities.

"We've both done everything according to the regulations, and I'm hopeful that things will proceed as they should," said Wang.

China Mobile posted a 1.6 percent drop in its quarterly profit on Thursday, hit by a slow economy, weak 3G rollout and increasing competition, causing its shares to hit a three-week low on Friday.



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