China Mobile may form a joint venture with British Virgin Group to provide mobile communication service.

Virgin Group had earmarked US$300 million for a mobile phone joint venture in China, the world's largest mobile market by users, sources said.

Virgin Group, whose mobile operations resell other carriers' service under the Virgin brand, aims to have a 50-50 venture with a Chinese partner in operation in 12 to 18 months.

Virgin Group was in talks with "several companies" about a mobile phone venture in the mainland, but declined to name his potential partners in a country with more than 300 million cellular subscribers.

China Mobile (Hong Kong) has about two-thirds of the market.

In addition, China has nearly 75 million users of a low-cost limited-roaming service called "Little Smart," which is provided by fixed-line operators China Telecom and China Netcom and their respective parent firms.

China Mobile (Hong Kong) Ltd. the world's biggest carrier by subscribers, said Tuesday it could spend up to 110 billion yuan (US$13.29 billion) to build a nationwide third-generation (3G) mobile network.

The company, which operates a 2G network in China, estimate a new 3G network would cost 100 million to 110 million yuan with a capacity of 70 million to 80 million users, a spokesman said.

In August, the company said the cost of a 3G network could be about 60 billion yuan in the first two to three years, calling the figure arough estimate.

The latest 3G spending plan was the first offered by new chairman Wang Jianzhou since he recently took the helm of China Mobile under a broader leadership reshuffle at China's top three telephone companies. Wang was previously chairman of China Mobile's top rival, China Unicom Ltd.

The company is expected to start building its network shortly after receiving a 3G licence from the government. Market watchers expect that to happen around the middle of next year.

(Shenzhen Daily-Agencies)