China Telecom, one of the three state-owned phone operators in the country, has accepted its second set of 31 teams to its incubator, including external entrepreneurs for the first time.
Eleven of the 31 teams in its Esurfing Innovation Technology Company are from outside the company, according to news provider Techne!.
The incubation period is up to two years with China Telecom employees able to return to their roles after this time.
China Telecom set up two internal innovation incubators with RMB200m ($30m) in Beijing and Shanghai at the start of the year.
The first batch of 14 teams graduated at the end of October, with three successfully having formed companies.
Wang Xiaoshu, chairman of China Telecom, expects to grow one or two companies with hundreds of billions in market capitalisation in five to six years, according to Techne! (source in Chinese).
China Telecom started spinning off its eight mobile internet businesses, under Esurfing brand, from its video service in March last year so they could receive external private investments,
The gaming business and mobile reading service went independent in August and November, respectively.