Telecoms dialing up financial products

China Telecom began offering a money market fund called Tianyibao on its mobile payment platform BestPay earlier this month. Geng Guoqing / For China Daily

Mobile phone companies home in on success of Yu'ebao

Facing stiff competition from private sector players, China's telecommunication giants are following in Alibaba's footsteps to launch online investment products as new value-added services to improve user loyalty as well as seek new growth.

China Telecom, China's third-largest network carrier by subscriber numbers, began offering a money market fund called Tianyibao on its mobile payment platform BestPay earlier this month.

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The product, which shares features with Alibaba's Yu'e bao, allows prepaid customers to get higher returns than a typical bank savings account on their bill deposits.

Customers can withdraw money whenever they like from the fund, which was jointly developed by BestPay and China Minsheng Bank. The product's advertised annualized yield is 5 percent.

China Unicom Ltd, the second-largest mobile carrier in the country, has likewise teamed up with a financial company, Shenzhen-based Essence Fund, to launch an online investment service, Huafeibao, to Shenzhen-based users, possibly by this week.

The service, which should be open to all China Unicom users soon, lets those who buy contract phones get advertised annual returns of 6 percent on their frozen bill deposits.

Ever since Alibaba launched its Yu'ebao online investment service last June, many tech companies in China have been trying to replicate the e-commerce giant's attempt to combine the convenience of the Internet with the sophistication of wealth management.

Telecom companies' entries into the sector is a rather new trend but also a strategically important one, said Ji Chendong, a Shanghai-based expert in technology, media and telecom.