The service has been quietly running for several months, it was launched as a trial venture into the mobile industry for the fixed line giant. Thus far 70,000 of the city’s residents have been attracted to the network, attracted by charges on a par with fixed-line calls; half the rate of China Mobile and China Unicom’s charges.

However, the Chinese Ministry for Information Industry (MII) has not yet granted the company a license for the network. Although the MII is China Telecom’s owner, it was unaware of the company’s launch.

Who gave them a frequency? How could they do this without a license? asked one MII official when told of the network. They can’t do this business, said a second official to the Financial Times.