US-based telecoms equipment maker UTStarcom Inc announced plans to enter China's mobile phone market by leasing a Chinese firm's handset manufacturing license. The company has until now focused its efforts on the limited mobility Xiaolingtong, or personal handy system (PHS) equipment market. Richard Feng, marketing director of UTStarcom (China), said the company planned to launch a mobile phone model based on the GSM standard later in January, adding that an application had been filed with Chinese regulators for a license to manufacture and sell mobile phones in the country. The announcement comes amid signs of a slowdown in growth of the Xiaolingtong service and a cut in capital expenditure on the system by Chinese fixed-line carriers China Telecom and China Netcom. UTStarcom is also facing growing competition from Chinese vendors such as Huawei Technologies and ZTE Corp, which have increased their share of the Xiaolingtong phone market.