Tom Online is negotiating with China's fixed-line carriers to offer services over cheaper intra-city networks in what could be a new source of revenue.
The services would be delivered using a wireless technology - personal access system (PAS), or xiaolingtong, offered by state-run carriers China Telecom and China Netcom Corp.
Tom Online's chief executive, Wang Leilei, said any deal would be similar to the revenue-sharing agreements Tom and other internet companies have signed with the dominant wireless carriers, China Unicom and China Mobile.
'We know there's a potential market in the business,' Mr Wang said at a ceremony in Beijing for the company's new logo. He would not provide estimates of when either carrier might be willing to sign an agreement.
Currently, Tom Online receives 75 per cent of any short-message service revenue, with the remainder going to China Mobile or China Unicom. For services requiring more bandwidth, Tom Online gets 85 per cent.
China had 32 million PAS subscribers at the end of last year, with 20 million held by China Telecom and China Netcom, according to UTStarcom, which provides equipment to this market.
Although far less than the 300 million wireless customers in China, a deal with the fixed-line operators for PAS would give Tom access to a large new customer base.
