China embraces fast line

BEIJING, May 25 -- China Saturday announced plans to push forward the reshuffle of its telecommunications industry which will split its smaller mobile operator and give its mobile business to two fixed-line operators.

China Saturday announced plans to push forward the reshuffle of its telecommunications industry which will split its sma- ller mobile operator and give its mobile business to two  fixed-line operators.(File Photo)

The country has encouraged China Telecommunications Corp to "buy" China United Telecommunications Corp's CDMA (code-division multiple access) network, while China Unicom's GSM (global system for mobile communications operations) will be merged with China Netcom, the Ministry of Industry and Information, the National Development and Reform Commission and Ministry of Finance said in a joint statement.

The announcement came after China Mobile Communications Corp announced the takeover of fixed-line operator China Tietong Telecommunications Corp on Friday.

China will issue the licenses for third-generation, or 3G, mobile services after the reshuffle is completed, the statement said.

After the revamp, China will have three large telecommunications carriers.

The industry reorganization will cut telecommunication costs, avoid duplicated investment in networks and lift phone penetration nationwide.

It will also fast-track the merger of mobile and fixed-line communications, according to a KGI Securities telecommunications report.

China is seeking to boost competitiveness at fixed-line operators, whose revenue is slowing as more people choose mobile services, Xi Guohua, vice minister of the Ministry of Industrial and Information, said previously.

"The revamp will change the market structure," said Sandy Shen, a Gartner's analyst based in Shanghai. "China Unicom and China Telecom will benefit from it but China Mobile will continue to dominate the market for a period."

It will take 12 to 18 months for the carriers to finish the reorganization and then China will prepare to roll out 3G services, which allow faster video and Web downloads.

China Mobile's 3G trial service made its public debut in Shanghai on April 1 and attracted huge crowds.