SmarTone Telecommunications Holdings is seeking equity participation in the mainland's telecommunications market after Beijing relaxes foreign-investment restrictions, according to chief executive Ian Stone. Mr Stone said the company wanted to expand in mainland telecoms markets other than in network provision. He said SmarTone was also interested in investing in application service providers and was looking to work more closely with China Mobile. China Mobile already has a consultancy project in about seven provinces and is conducting a General Packet Radio Service (GPRS) trial in the mainland, Mr Stone said. As Beijing is contemplating a limit on foreign telecoms participation to companies which had two consecutive years of turnover above US$10 billion, Mr Stone said Smartone would be happy to link with major telecoms. 'For large-scale projects, we will always look for partnerships,' said Mr Stone. 'It is most likely to be British Telecom.' British Telecom, the second-largest shareholder in SmarTone with a 20 per cent stake, set up a 50:50 joint venture with SmarTone in developing a mainland mobile portal. The two companies are also tied in roaming and GPRS trials. 'We together looked at some 2G, and even 3G opportunities in the region,' Mr Stone said. Franklin Resources, the sixth-largest United States mutual fund company, yesterday disclosed the purchase of 60.49 million shares, a 10 per cent stake, in SmarTone. Mr Stone declined to comment on the stake report but merely said: 'SmarTone offers very good value'. SmarTone yesterday announced the start of a pilot GPRS service in Hong Kong involving 100 commercial users. Mr Stone said this service, which is limited by the number of GPRS handsets in the market, would be provided to subscribers this year. SmarTone deploys SAGEM handsets and will bring in other wireless devices such as personal digital assistants and pocket personal computers to speed penetration. While the service price has not been set, it is likely to be charged by usage, not minutes - a different pricing model to second-generation voice-only services. Mr Stone said the GPRS service enables speeds three times faster than at present. SmarTone had spent HK$70 million to HK$80 million developing GPRS technology but expects no more capital expenditure in the years to come. Mr Stone said GPRS was a first step to providing 3G services but could not see 3G services replacing existing services for five to six years.