Increased overseas fund-raising efforts by mainland Internet companies are expected this year amid intensifying competition, according to an America Online executive.
'The Internet has fast become a very competitive business in China, where operators are largely under-capitalised,' said Lee Kheng Joo, America Online's vice-president of Greater China operations.
This week's sale by mainland Internet-service provider Cenpok InterCom Technology of a stake in its Web site operation - Beijing Online - to SAR-listed Pearl Oriental Holdings was an example of such an activity, he said.
Mr Lee said operators had to buy lease lines from China Telecom at high rates, making it difficult for small operators to survive.
Vickers Ballas analyst Eric Tomter said the low barriers of entry would exacerbate competition in the industry, thereby increasing its risk.
He expected large telecommunications operators such as China Telecom to gain at the expense of smaller ones.
