BEIJING, May 27 -- China Netcom Group, the smaller of the country's two fixed-line carriers, on Friday launched a subsidiary devoted to providing video offerings to broadband Internet users.

    The new company, wholly-owned by Netcom, will operate CNC Max, a Web portal providing paid-for video-related Internet content.

    According to Zhang Changsheng, senior vice-president of China Netcom Group Corp (Hong Kong) Ltd, Netcom now has more than 13 million broadband subscribers, compared to 3 million in 2003.

    The number of broadband subscribers is growing slowly, something that has pushed Netcom to seek new revenue streams by offering Internet content.

    Currently Netcom's revenue from Internet-related services mainly comes from the access service.

    "By offering attractive Internet content, we will manage to improve the ARPU (average revenue per user)," said Zhang, who is also chairman of CNC Max.

    "We aim to become a flagship provider of Internet content and applications in three years."

    Internet users will be able to buy and watch video offerings on CNC Max, including live broadcasting, VOD (video on demand), TV, music, games and online learning.

    All operations will be carried out using a remote control, which will enable people to enjoy online video offerings in their living rooms.

    "Such an all-video portal will bring a new online experience and help us woo people aged 7 to 70," said Zuo Feng, general manager in charge of Netcom's Internet content division.

    The official said Chinese Internet users are showing increasing interest in paid-for online services.

    About 560,000 Internet users this week paid to watch a live online concert by the winner of the "Super Girl" singing contest.

    Each user paid 6 yuan (75 US cents) for a ticket for the live online show, organized by Netcom.

    "Super Girl" was one of the most popular TV contests ever held in China.

    Zuo Xunsheng, president of China Netcom Group Corp (Hong Kong) Ltd, said the firm would develop new business models and seek partnerships with other industry players to spur the Internet content market.

    "That is part of our mission to transform Netcom from a telecoms firm to a comprehensive service provider," he said.

    The launch of the new subsidiary has cast a shadow over the prospects of a telecoms service joint venture between Netcom and the International Data Group (IDG).

    Netcom in 2004 launched the joint venture, which is also a portal called Tiantian Online, providing broadband Internet content.

    (Source: China Daily)