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China Telecom Establishes Internet and VAS Subsidiary

Tencent Tech, 4/21/08

An informed source within the China Telecom Group (NYSE: CHA; 0728.HK) has revealed that the company has announced internally that it will form a new independent subsidiary to run Internet and value-added services (VAS). This will be realized by merging all business associated with the Vnet.cn portal, the Internet and VAS department and existing VAS subsidiary China Telecom Information Development (CTID) into a new company, which will run Internet, VAS and mobile services.

After the changes CTID will have three areas of responsibility: The construction, operation and maintenance, development and improvement of China Telecom's group-wide Internet and mobile Internet platforms; the operation and day-to-day development of China Telecom's group-wide Internet application services and VAS, including cooperation with service and content providers (SPs and CPs), customer assistance for content application services, and dealing with complaints about SPs and CPs; and at the behest of the relevant service operators, provision of technical and business guidance and training for provincial level platforms which connect with group-wide platforms.

CTID was founded in June 1998 and is a wholly-owned China Telecom subsidiary, with business scope covering national telephone information services, mobile VAS, telephone conferencing, Beijing Telecom's telephone information services and IDC services. CTID is also developing an instant messaging tool on behalf of its parent company.

It is reported the new company will be headed up by the current GM of CTID, and be overseen by the China Telecom Group's Party organization.

China Telecom is to establish a dedicated team to run and monitor mobile service platforms, along with incentive mechanisms closely tied to business growth. Once the new policies are in place, mobile Internet services and mobile service platforms will be managed by a China Telecom Group department, with the operation and maintenance of the platform handled by the network operations and maintenance department.

Keywords: SP content provider corporate restructuring Internet Data Center wireless 0728.HK Beijing Telecom CHA China Telecom China Telecom Information Development Instant messaging mobile Internet telecom VAS Vnet

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