China Telecom teams up with Alibaba on apps, payments, and data

A Reuters report today revealed phones sold by China Telecom (NYSE:CHA; HKG:0728), the country’s third-largest telco, could come pre-installed with apps from Alibaba. The apps include Taobao Marketplace, China’s most popular shopping portal, and Alibaba’s social messaging app Laiwang.

The apps are just part of a new partnership between China Telecom and Alibaba. The two companies will also work together to build cloud data centers and launch a new smartphone payment scheme called Alipay Credit Guarantee. The guarantee is similar to a “no upfront payments” deal when buying a car.

Former Alibaba CEO and current chairman Jack Ma praised the deal (article in Chinese) signed Friday.

Chinese telcos partnering with big Chinese web companies is now becoming common practice to reel in customers. We reported last month China Unicom offered a plan for users who want to use WeChat, China’s most popular messaging app, but don’t want to pay for a data plan. It quickly became a popular option.

Chinese search giant Baidu’s apps already come pre-installed on many smartphones sold in China.

Anticipation has been growing as Alibaba nears an inevitable IPO sometime in the near future. A partnership with China Telecom will serve to boost its share prices.

(Editing by Steven Millward)