Pacific Century CyberWorks has formed a 200 million yuan (about HK$187.4 million) joint venture with China Telecom to provide information technology services to the mainland financial sector. The venture, CyberWorks' second with a mainland company this year, will allow it to participate in the lucrative US$7 billion a year IT spending in the sector, which takes in banking, insurance and securities markets. CyberWorks chairman Richard Li Tzar-kai said: 'This partnership with China Telecom marks the most important step for PCCW's growth strategy in China so far.' Hong Kong's dominant fixed-line carrier will take 48.5 per cent of the yet-to-be-named IT joint venture with China Telecom owning 51.5 per cent. In February, CyberWorks formed a joint venture with China Petroleum and Chemical Corp (Sinopec). CyberWorks took a 45 per cent stake in the joint venture, aimed at providing IT services for Sinopec and the petrochemical industry. The mainland telecommunications value-added service area is the first segment of the county's telecoms industry opened to foreign investment. But foreign investors are still not allowed to own majority stakes in any telecoms-related business. CyberWorks' chief operating officer Mike Butcher said it had management control in its China Telecom joint venture. 'We are taking PCCW's knowledge and expertise in IT solutions, especially in the financial sector, and combining it with the current market and customer position in China,' Mr Butcher said. 'We think combining the two is a winning formula.' The venture, with headquarters in Beijing, is to be finalised in 30 days and is scheduled to start operation within 90 days. Initial staff will be more than 100. Mr Butcher said both sides could contribute assets to the joint venture, which could include a related systems integration business in Hong Kong and a call-centre service with China Telecom in the mainland. After setting up the two mainland joint ventures, Mr Butcher expected more revenue to come on stream from next year. Last year, CyberWorks' mainland revenue grew 20 per cent to 30 per cent but still made up a relatively small proportion of the company's HK$20 billion revenue, Mr Butcher said. Mr Li previously indicated operations in China, which he placed high hopes on as a fast-growing business unit, could contribute 10 per cent of CyberWorks' revenue this year. Analysts generally welcomed the latest mainland joint venture, although revenue and profit implications were minimal. HSBC Securities said the joint venture was a sensible move for both companies. 'PCCW can enjoy a share of up-front consultation revenues, while China Telecom will enjoy ongoing connectivity revenues from the facilitation to customers,' HSBC said in a note to clients yesterday. CyberWorks has completed 14 IT assignments in the finance sector in Hong Kong in the past two years and projects revenue of US$170 million for its IT business. China Telecom president Zhou Deqiang said: 'Together, we can help Chinese enterprises with their IT development and enhance their competitiveness.'