China Telecom plans to launch mobile service in US

China Telecom's service is geared for customers who frequently travel between the US and China

China Telecom plans to launch a mobile service in the U.S. geared for Chinese-Americans, students and tourists who frequently travel between both countries, according to a company spokeswoman.

China Telecom's U.S. subsidiary is still in the planning stages for the service, and has yet to determine the exact launch date, said company spokeswoman Lisa Lai.

The service would launch as a mobile virtual network operator (MVNO), Lai added, without specifying which U.S. partners China Telecom would work with. MVNOs work by purchasing network capacity from existing operators and reselling it to customers.

China Telecom has 116 million mobile subscribers in its own home country, making it the smallest of China's three mobile carriers. Launching the service could help boost the company's user numbers, given that there are many Chinese who travel to and from the U.S., said Nicole Peng, a research director for analyst firm Canalys.

"Their main interest isn't really to compete in the U.S. market," she added.

China Telecom, however, is a state-owned enterprise and its plan to launch its mobile service could attract unwanted scrutiny from U.S. regulatory authorities. The same has happened to Chinese networking equipment suppler Huawei, a company U.S. officials are concerned is linked with the Chinese military. Several Huawei business deals have been blocked as a result.

"(China Telecom) is a large Chinese company, and the U.S. might not be happy to see this," Peng said. "It will be interesting to see how the U.S. government handles this, because in the past when Huawei was making investments in the U.S., there were a lot of issues."

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