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Alibaba to pre-install apps on China Telecom phones: source

By Paul Carsten

BEIJING (Reuters) - Alibaba Group, whose plans to go public could value the company at over $100 billion, may soon have their apps pre-installed on China Telecom's mobile phones, said a source familiar with negotiations between the two firms.

Alibaba signed a strategic agreement with China Telecom on Monday but did not disclose details of the deal.

"Areas of potential collaboration going forward include pre-installing China Telecom contract mobile phones with Alibaba Group applications," said the source.

These apps include Taobao Marketplace and Laiwang, Alibaba's social messaging app.

Tencent Holdings launched a WeChat SIM card on China Unicom in August. The SIM card gives users extra data specifically for use on Tencent's wildly popular WeChat social messaging app, which now has 236 million active users.

Baidu Inc, China's dominant search engine provider valued at $49 billion, already has its apps widely pre-installed on Chinese smartphones.

Alibaba's apps will mostly be installed on China Telecom's 3G subscription smartphones. The carrier, China's smallest of three, has a 26.48 percent share of the country's total 341.32 million 3G subscribers, according to carrier data for July.

Alibaba, Baidu and Tencent, China's three largest internet companies, have been ramping up efforts to cash in on China's rapidly growing mobile internet market.

Alibaba is preparing for an up to $15 billion initial public offering either this year or the next.

Baidu acquired NetDragon Websoft Inc's 91 Wireless app store for $1.85 billion in August. Alibaba bought stakes this year in Sina Corp's social-networking website Weibo and in navigation and maps firm AutoNavi Holdings Ltd.

Morgan Stanley estimates China's mobile Internet market could more than treble to around $30 billion by 2015, driven by a surge in demand for mobile gaming, advertising, and e-commerce.

(Reporting by Paul Carsten; Editing by Jeremy Laurence)

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