China Telecom and China Netcom, the country's largest two fixed-line operators, are to join their "Little Smart" wireless telephone services by linking up their short messaging services.

A short messaging connection ceremony between the two operators will be launched Monday in Beijing, says China Netcom.

Sources close to the company said that the price for each short message connected between the two operators will be charged at 0.08 yuan (0.96 US cents).

In other words, "Little Smart" phone subscribers can send short messages to counterparts in 21 South China provinces dominated by China Telecom or in 10 North China provinces dominated by China Netcom.

Analysts believe that the linking of the short message services will definitely provide a strong shot in the arm, further boosting the development of "Little Smart."

"Little Smart," also called Xiaolingtong, is built onto the existing fixed-line network and lures users with low per minute rates, one-way charges and cheap monthly fees.

"Short messaging connections will definitely further popularize Xiaolingtong services," said Dai Chunrong, an analyst with China Securities.

"Meanwhile, it will substantially contribute to enhancing the ARPU (average revenue per user) for Xiaolingtong services," she said.

Government figures show that the two fixed-line operators had recruited about 62 million Xiaolingtong subscribers at the end of last month.

"There is still market potential for the development of Xiaolingtong as it meets the demands of low-end customers," said Si Furong, managing director of China Telecom Corp Ltd, a listed arm of China Telecom Corp.

Both China Telecom and China Netcom have spent hundreds of millions of dollars this year on Xiaolingtong. The services are designed to counter China Mobile and China Unicom, since both China Telecom and China Netcom do not have mobile licences.

Si says China Telecom is currently in contact with China Mobile and China Unicom about connecting the short messaging service to mobile phone subscribers.

"But there is no set timetable for the connection," he said.

(China Daily September 25, 2004)