AT&T, the telecoms giant being bought by SBC Communications for $16 billion, said on Thursday its China revenue is set to grow about 20 percent this year as it and its peers struggle to gain a foothold in the tightly controlled market.
AT&T, along with rivals like BT Group and Vodafone Group, held out large hopes for the China market early in the decade, as the country embarked on a multibillion-dollar build-up of its creaky telecoms infrastructure.
Today China is the world's biggest telecoms market by users, with 343 million fixed-line and 373 million mobile subscribers at the end of August, according to state data.
Yet despite the rapid growth and relaxation of investment rules, foreign carriers have been largely left on the sidelines of the build-up, thwarted by stiff regulation that makes investment difficult, executives say.
AT&T was a pioneer in the market when in 2000 it announced the formation of a $25 million telecoms services joint venture in Shanghai - the first such venture with foreign participation.
Five years later, that venture, called Symphony, is still largely confined to Shanghai, and AT&T has invested just over $5 million in China in the last few years, said Steve Lowe, president of AT&T's Asia Pacific region.