China Mobile plans to enter Internet market

China Mobile, the country's largest mobile carrier by subscribers, is mulling to set up an Internet firm, media reported Wednesday, a move experts said is aimed at boosting its instant messaging (IM) service.

Lin Zhenhui, chairman of China Mobile International Ltd, would serve as general manager of the preparatory group, according to domestic telecom information portal ccidcom.com.

China Mobile did not respond to the Global Times' request for comment by press time.

The new Internet company may integrate and further develop China Mobile's IM business Fetion, Ma Jihua, an industry expert at Beijing Daojing Consultant Co, told the Global Times Wednesday.

Given the carrier's large subscriber base, China Mobile's Fetion has the potential to compete with the country's Internet giant Tencent, operator of China's most popular IM app WeChat, said Ma.

Fetion, launched in mid 2007, was initially used by China Mobile's cell phone subscribers, but has now lost traction.

Fetion has garnered only 6.47 million users as of July, according to its website, while WeChat had accumulated over 438 million monthly active users by the second quarter.

The decision to establish an Internet firm may boost China Mobile's earnings and help the company win back some consumers, Fu Liang, a Beijing-based independent telecom analyst, told the Global Times Wednesday.

China Mobile failed to report expected financial results in recent quarters.

The net profit of China Mobile fell by 8.5 percent year-on-year during the first half of the year, according to its financial report released in August.

"In addition, it seems to be a good timing for China Mobile to enter the Internet market, as the company has made an early start in the 4G market, making it possible to offer Internet services using 4G networks at greatly improved speed," Ma noted.