China Telecom, Netease jointly launch mobile chat app

Zhang Zheng, former head of NetEase's marketing department and now general manager of Zhejiang Yixin Technology, said Yixin aims to have more than 100 million registered users within six months, with an active user base of more than 50 million.

"We hope Yixin can acquire more than half of the mobile messaging market in China," Zhang said at a Beijing briefing on Monday.

Yixin supports both Apple Inc's iOS platform and Google Inc's Android mobile operating system and was available for download from various application stores from Monday.

"It will become a trend that Chinese telecom operators and Internet companies strengthen ties," said Duan Yu, an analyst with Minsheng Securities. Telecom operators hold resources of network infrastructure but are not responsive to the market demands of innovative mobile services.

On the other hand, Internet companies are fast to respond to service requests but they need strong hardware support from the carrier side, Duan said.

Quarrels broke out between Chinese telecom carriers and WeChat on profit-split issues at the beginning of this year, signifying increasing conflicts between telecom operators and OTT service providers. But the two sides seemed to reach a consensus to phase out the anger by turning to win-win solutions.

In July, China Unicom (Hong Kong) Ltd's Guangdong branch joined hands with Tencent to launch the nation's first subscriber identification module card customized for WeChat.

China Telecom's Yang said the cooperation with NetEase was an important move for its strategic transformation. "We will follow the trend, actively embrace changes and move forward into the mobile Internet era," said Yang.

Ding from NetEase said: "Amid the wave of mobile Internet, all the Internet and telecom industries are restructuring."

Duan at Minsheng Securities estimated that Internet companies may have a bigger say in cooperation with telecom carriers in the future. "When Internet enterprises develop popular applications and accumulate large customer bases, they'll leverage the weight to ask for more favorable offers from carriers," Ding said.

China Mobile Ltd, the nation's largest telecom operator, launched mobile messaging application Jego in June but suspended the service three weeks later.