China's fixed telecom operator China Telecom (CHA) has launched a trial search service on its ChinaVnet website and plans to formally put the service online in October.

China Telecom has issued a circular to each of its provincial branches, asking them to adopt Microsoft's (MSFT) search technology and to stop cooperation with all other search engine service providers including Yahoo (YHOO) China and Google (GOOG).

China Telecom and Microsoft will cooperate for a period of two and a half years starting from June this year to the end of 2008. During this period, Microsoft will pay US$21 million to China Telecom as fund technical support while the China Telecom will also share traffic revenue with Microsoft.

China Telecom made the plan for developing search services in the first half of this year and has made "114" part of its search brand. At present, China Telecom's search service includes voice search and Internet search.