AsiaInfo will pay US$8.2 million for a 20 percent stake in Shanghai-based Intrinsic, with an option to invest additional capital of up to 51 percent over the next two years.
The investment in Intrinsic, whose software allows mobile-phone operators to manage online content and bill customers for it, will help AsiaInfo tap into the market for mobile Internet access, the company said.
"We consider wireless Internet as the single most important growth area for our business in years to come," said Fan Bao, AsiaInfo's senior vice president for business development and chief strategy officer. The company hopes to gain a market share of "over 50 percent," he said.
China Mobile Communications Corp, China's biggest mobile-phone operator, needs software like Intrinsic's as it plans to offer subscribers online content on their handsets, Bao said.
China Mobile said in November it will introduce a service called Monternet, allowing customers surf the Internet and send emails from their mobile handsets for a fee. The company will charge users on behalf of the Internet content providers and collect a commission in return.
Growth potential
"The wireless Internet market in China is in its early stages, and there is a lot of potential for growth," said Jun Wu, Intrinsic's chief executive.
China's number of mobile-phone subscribers rose 18 percent in the first quarter of 2001 to 100 million, according to the Ministry of Information Industry. The regulator expects 290 million cell-phone users in China by 2005.
AsiaInfo helped build the country's four national Internet networks. Its customers include state-owned telecommunications companies such as China Telecom, China Mobile, China Unicom and China Netcom Corp.
Shares of Nasdaq-listed AsiaInfo fell US$0.094, or 7.2 percent, to US$13 yesterday.
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