Skype is looking to make inroads into the potentially lucrative Chinese market after inking a joint venture (JV) agreement with wireless internet operator TOM Online.

The two companies are already buddies having forged an agreement to develop a simplified Chinese version of Skype's internet telephony software. Ten months on and the software has attracted 3.4m registered users and Skype reckons now is the right time to plug the service to TOM's 70m punters.

Under the deal TOM and Skype (split 51 per cent and 49 per cent respectively) will continue to develop Skype's VoIP software for the Chinese market and do more to flog it to users.

Said Skype chief exec Niklas Zennstrom: "By uniting Skype's market-leading global Internet communications platform with TOM Online's wireless leadership and understanding of the needs of Chinese market we believe we have a powerful mix of skills in place to bring the Skype experience to millions of Internet users."

China is the world's largest mobile phone market by users with more than 360m subscribers. The number of net users is also expanding rapidly and is expected to hit around 150m by 2007, according to research from IDC.

Last week Skype signed its first agreement with a mobile telecoms operator - Germany's E-Plus - taking its low-cost services beyond the desktop and on the road. ®