Rumor: China Mobile, Alibaba Partner on Fetion Operation

Tencent Tech, 10/24/14

According to an industry source, China Mobile (NYSE: CHL; 0941.HK) and Chinese e-commerce conglomerate Alibaba Group (NYSE: BABA) are planning to establish a joint venture entity responsible for operation of China Mobile's Fetion mobile messaging platform. The companies also plan to cooperate on the release of mobile products running on Alibaba's self-developed Aliyun OS (YunOS), including both China Mobile self-branded smartphones and other products.

The Fetion partnership will be similar to the existing agreement between China Telecom (NYSE: CHA; 0728.HK) and internet company NetEase (Nasdaq: NTES) regarding joint operation of their mobile IM software YiChat. Beijing-based IT solutions provider Ultrapower Software (300002.SZ), a technology service provider for Fetion, is also likely to invest in the joint venture. A specific time table for the establishment of the JV has not been revealed.

The new JV will look to integrate Fetion seamlessly into smartphone address books and keypads in an attempt to make Fetion the default communication tool for Aliyun OS users.

Editor's Note: Marbridge also heard from an industry source earlier this month that China Mobile was rumored to be in discussion with Qihoo 360 (NYSE: QIHU) for a similar cooperation on Fetion.

Keywords: wireless Fetion mobile IM JV CHL 0941.HK Ultrapower 300002.SZ Alibaba Group Aliyun BABA Qihoo 360 QIHU

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