China's biggest online games operator is in talks to distribute Chinese-themed martial arts and sword-fighting games on cell phones for the first time in the world's largest mobile phone market.

Shanda Interactive Entertainment Ltd. - run by Chinese billionaire Chen Tianqiao - said it wants to distribute the games through China Mobile (H.K.) Ltd. and China Unicom Ltd. when they start offering high-speed cell phone services to users.

"Games will be one of the most important features on a Chinese mobile phone, along with short-message services,'' said Marvin Lo, a Hong Kong-based analyst with BNP Paribas Peregrine Securities Ltd. "Games will be one value-added service that allows mobile phone operators to charge more.''

Analysts expect China Mobile and Unicom to secure licenses to operate the so-called third-generation services in China - a nation with 320 million mobile phone users as of end-September.

Shanghai-based Shanda said today its third-quarter profit more than doubled as online games such as The World of Legend, which lets users stage a virtual swordfight, drew more paid users and advertisers. The gaming business currently accounts for 90 percent of sales and is growing at 20 percent a quarter.

Chen, who ranked third in Forbes's list of the mainland's richest men this year with an estimated worth of US$1.23 billion, said the company had also developed a system to bill mobile phone users who play its games on their handsets.

Almost every adult in China's richest cities owns a cell phone, Unicom said in August. Profit growth has slowed at Unicom and China Mobile after they slashed rates on basic phone services to compete, forcing them to look for other features to lure users.

Shanda's third-quarter net income rose to 165.1 million yuan (US$20 million), or 2.2 yuan a share, from 78.3 million yuan, or 1.14 yuan, a year earlier, the Nasdaq-listed company said in a statement. Sales rose 133 percent to 372 million yuan.

Shares in Shanda have risen 33 percent since they began trading in May. They rose 8.5 percent to US$33.09 Tuesday before earnings were released.

Eachnet, a unit of Ebay Inc., last month agreed to place online advertisements, including banners and pop-ups, on Shanda's games Web site.

Source: Shenzhen Daily/Agencies