While ringtones, text, picture messages and music are the most widely used entertainment services among China's 500 million mobile-telephone users, visual and filmed content is catching up fast. By the end of 2007, 50.4 million mobile-phone owners had access to the internet via their mobile phones.

China's two telecoms carriers, China Mobile and China Unicom, are eager to ramp up their online services and offer games and video-sharing, as well as films and TV programmes.

In late 2005, Shanghai Media Group (SMG) acquired the first Iptv licence in China and teamed up with China Mobile to launch the first mobile TV services in China, including streaming selected films from the Shanghai Film Group.

For its part, China Unicom is also now working with SMG as well as 12 local channels.

By the end of last year, SMG claims the number of subscribers reached 500,000 for its mobile TV service. Another major broadcaster, Cctv, also began its mobile TV services before the end of 2006. It offers TV and film content to both China Mobile and China Unicom.

Consumers can also watch mobile-phone movies through internet companies, or the so-called value-added service providers. There are dozens of internet companies offering feature-length films or short films to China Mobile and Unicom. They charge an average $1.10 (rmb8) per month for movies. Among them, BBVod, Netmovies, Fone Net and Zongbo Media are the more mature companies. In addition to offering Chinese, Hong Kong or Korean titles, Zongbo also produces original short films for mobile phones.

"So far, watching movies on the phone is not that popular and many consumers might just try once out of curiosity. But you can never underestimate a consumer's curiosity in China," says Li Luyang, president of Quacor. "Just because of many consumers' one trial, many internet companies get to grow so fast they have become Nasdaq companies."

Beijing-based CCW Research estimates that by the end of 2008, the market value of mobile TV will reach $180.5m (rmb1.3bn).

Besides partnering with telecoms carriers, both Netmovie and Quacor plan to work with mobile-phone companies such as Motorola and Gionee to provide storage of movies for the new generation of mobile phones. Consumers will be able to connect directly to Netmovie.com and Quacor.com in a move similar to that of the iPhone's mooted film-download service.

One of the reasons for the rather slow development of mobile TV or movies is the late arrival of 3G systems in China. Although telecoms analysts believe China will not issue 3G licences anytime soon, China has developed its own system similar to 3G called TD-Scdma. It will be introduced in major cities before the Beijing Olympics, during which users will be able to watch updates of the games.

"With the wireless environment improved, we believed 2009 will be a big year for (watching films on) mobile phones," says Li.