China Mobile, Google Hold Talks On Mobile Search Engine "

HONG KONG -(Dow Jones)- China Mobile said Thursday it is in talks with Google to launch an Internet search engine for mobile services in China.

China's largest mobile carrier by subscribers is keen to explore mobile data services to offset declining revenue from the traditional voice services. Its average revenue per user in the first quarter fell to CNY86 from CNY92 in the fourth quarter last year.

"I recently met with Google's CEO for the second time. And we both share the same idea: how to turn cell phones into a new kind of Internet search engine," said China Mobile (Hong Kong) Chairman and Chief Executive Wang Jianzhou.

Wang didn't elaborate further on the two companies' cooperation on the mobile search engine, but said it will mean significant progress in China's mobile service.

Google wasn't immediately available for comment.

China Mobile is also seeking to grow through overseas acquisitions.

Its parent, China Mobile Communications, is the leading bidder for Millicom International Cellular, an operator of cellphone networks in 16 countries across Africa, Asia and Latin America, people close to the matter said.

Wang, who is also president of the parent company, wouldn't confirm if it is involved in the bidding.

"The parent company has nothing to announce at the moment," said Wang, adding the Hong Kong-listed China Mobile has no plan for any share placement to fund acquisition activities. "Our parent company has enough cash."

If the deal goes through, it will be China Mobile Communications' first overseas acquisition.

Its last attempt to expand overseas failed. It was one of the final three bidders for a 26% stake in Pakistan Telecommunications last year, but the stake was acquired by United Arab Emirates-based Emirates Telecommunications, or Etisalat.

In January this year, China Mobile (Hong Kong) completed its HK$3.38 billion acquisition of Hong Kong mobile carrier China Resources Peoples Telephone.

Wang said Peoples Telephone, which has been renamed China Mobile Peoples Telephone Company Ltd., buys network equipment in bulk with China Mobile, trimming its expenses on equipment by about half.

Wang didn't give figures for equipment expenses.

-By Ernest Kong, Dow Jones Newswires; 852-2802-7002; ernest.kong@dowjones.com

-Edited by Sharon Buan

(END) Dow Jones Newswires"

Posted to the site on 18th May 2006