Huawei Technologies, the country's leading telecoms equipment provider, said Wednesday that it is talking with the country's two leading fixed-line telecoms operators to roll out its home networking solution to create a new business growth area.

Home networking is a new technology which integrates PCs, telephones, electrical appliances, and all intelligent terminals within a house into a wide area network.

With the integration, the solution enables people to have real time communication with their house anytime, anywhere as well as other multimedia applications via digital devices such as a mobile phone or a PDA.

"We are talking to China Telecom and China Netcom about introducing such a service as soon as possible," said Ren Xuebin, director of the Fixed-line Solution Division of Huawei Technologies.

He said he believed that the service would greatly help fixed-line telecoms operators cultivate a new growth area. Currently, fixed-line operators' voice business have been greatly encroached upon by the increasing popularity of mobile phones and Xiaolingtong, a wireless telephone services.

Also the quick spreading of instant messaging services such as MSN messenger and ICQ have also contributed to a deterioration of the situation.

Though new to China, Huawei is deploying its home networking system in Europe and Latin America.

Ren says operators such as Britain Telecom, France Telecom, Telefonica and Telemar are all adopting its home networking solutions.

"We are planning to kick off several pilot areas for home networking solutions in China in the second half of the year," he said.

Beijing, Shanghai and Guangzhou will be among the first to launch experimental testing of the system.

He said he believed that among all services, video phones, online games and online education would be the top three major applications to appeal to customers.

However, solutions will based on the combined efforts of telecoms operators, equipment providers, service providers and content providers, he said.

"Later on we will talk to mobile operators as it is inevitable for there to be convergence of fixed and mobile lines for successful deployment of the services," he said.

Industry experts believe that with the increasing popularity of PCs, MP3s, electrics appliances and other electric terminals, there is great potential for the Chinese household to start home networking-related services.

But Ren said a real boom for the service would be unlikely to be seen in China until next year as the market still needs development.

With an annual revenue of US$3 billion, Huawei Technologies is strong enough to compete with international IT giants such as Lucent and Cisco.