French communications equipment maker Alcatel said yesterday it planned to create a joint venture with China's TCL Communications to make and sell mobile phone handsets.

TCL is to contribute 55 million euros (US$65.36 million) to the venture and will take an initial 55%. Alcatel will have 45% after contributing 45 million euros (US$54 million) including its mobile handset business, and about 600 staff.

The combination opens the way to Alcatel's eventual withdrawal from the handset business, which would rid it of one of its last loss-making activities and bring the company even closer to its goal of returning to profit. For TCL, the deal marks another step toward its goal of becoming a global telecoms player by giving it access to Alcatel's technology and to markets in Latin America, Africa and Europe, where it remains weak despite its strong position in China.