Skype takes JV route for Chinese foray

Going ahead with its aggressive global expansion plan through regional alliances, Skype has now joined hands with Tom Online of China to cater its services to consumers in the most populated nation of the world. The move is further viewed as Skype’s initiative to consolidate its position in the fast growing Asian market by building a base in the most robust economy in the continent. The two companies made the formal announcement of their joint-venture agreement on Monday.

In the joint venture, which marks Skype’s first foray in China, the majority stake will be held by Tom Online at 51 per cent holding while remaining will be held by Skype. The partnership is aimed at developing and distributing internet telephony software to mobile service providers and facilitate huge subscribers pool in the country to make internet calls anywhere in the world by making use of broadband connection. Skype CEO Niklas Zennstrom says, “China is one of our absolutely top markets; it is a big growth market for broadband.”

Tom, a Hong Kong-based wireless Internet service provider, which is controlled by Hutchison Whampoa already has an existing deal with Luxembourg-based Skype inked in November 2004 under which a Chinese version of Skype software has been developed. The joint venture agreement is meant to further that deal which has already netted over 2.5 million registered users. For Skype, the new agreement seems to be poised to put in a win-win situation in the Chinese market since Tom has a subscriber base of a whooping 70 million.