China Telecom, a leading fixed-line phone operator in China, has joined the country's fierce Internet search engine competition with Microsoft as its technical partner.

A search engine titled "114", an established telephone inquiry service in China, has appeared on China Telecom's partner website, www.vnet.cn..

The service is still in trial period and formal service will be started in early October, a source at China Telecom told Xinhua Thursday.

The website now provides for web-page and yellow-page search services,as well as BBS and Blog search services.

Search services for local information, pictures and video images will be unveiled in two months, the source said.

China Telecom boasts 210 million phone subscribers and more than 80 million Internet clients. It also runs more than 400 local portals.

China Telecom's partnership with Microsoft was formally announced by the two sides in Beijing on Tuesday.

Luo Chuan, the general manager of the China Region of the Microsoft Online Service Group, said cooperation with China Telecom would expand the market of Microsoft's Live Search technology and increase its share in the on-line advertising market.

Before entering into the agreement with Microsoft, China Telecom terminated its cooperation with Yahoo! in search services in August.

China Telecom has also instructed its provincial branches and portals to adopt Microsoft technologies and terminate cooperation with other search engines.

Earlier media reports said the cooperation would last till 2008, and that China Telecom would share revenues of the search engine service with Microsoft on a 70-30 split in 2007 and 50-50 in 2008.

In addition, Microsoft will pay 21 million U.S. dollars to China Telecom as a base income.

Both parties declined to confirm the report.

Source: Xinhua