The first telecom Sino-foreign joint venture in the Chinese mainland launched its service in Shanghai's Pudong New Area Friday as the country opens up its previously tightly controlled telecommunications market to foreign investors.

Shanghai Symphony Telecommunications was established 15 months ago by Shanghai Telecom (the local arm of China Telecom), the United States firm AT&T and Shanghai Information Investment of the Shanghai Municipal Government. The joint venture has started to provide broadband Internet Protocol value-added services under the brand name UNISITI.

US telecom operator AT&T holds 25 percent of shares in the joint venture and is the first foreign telecom company to operate on the Chinese mainland.

AT&T chairman and chief executive Michael Armstrong said UNISITI represents an important part of the AT&T global strategy.

"The growing role China plays in the world economy -- in manufacturing, in trade, and in finance -- means that AT&T must also be here to serve our customers and to participate in China's economic growth,'' he said.

It also reflects the AT&T strategy to invest in key commercial centers such as Shanghai.

Zhou Deqiang, president of China Telecom, said the joint venture has established a model for other Chinese telecom firms in co-operating with foreign counterparts.

"We also hope that, by co-operating with AT&T, Shanghai Telecom can absorb advanced expertise and build up our own brand,'' he said.

Shanghai Symphony Telecommunications is the first telecom joint venture established since China opened its doors to limited foreign investment in the sector under agreements it made to join the World Trade Organization.

Wu Jichuan, minister of the information industry, said in a congratulatory letter that the move symbolizes China's courage in opening up its telecom industry.

According to China's World Trade Organization agreements, foreign investors will be allowed to own up to 49 percent of joint ventures in Beijing, Guangzhou and Shanghai within three years. But the rest of the country is effectively off-limits until 2005.

Shanghai Symphony Telecommunications will operate only in the city's Pudong area. The firm is targeting multinational firms as well as the growing number of Chinese enterprises with operations overseas.

According to a source close to the company, Shanghai Symphony Telecommunications has already provided business to some multinationals in Pudong.

Earlier reports said 20 of the world's top 500 multinationals -- involving nine industries -- are negotiating with the new telecommunications company on business co-operation.

Armstrong said: "As significant as today's announcement is, we are confident that it is only the beginning.

"And we look forward to expanding beyond Pudong,'' he added.

(China Daily March 23, 2002)