China plans three telecom giants

BEIJING, May 27, 2008 (AFP) – China plans to create three telecom giants as it seeks to bring balance back to an industry where mobile operators have seen the fastest growth by far, the government and state press said Tuesday. Under the plan, the world’s biggest mobile operator China Mobile will acquire fixed-line operator China Tietong Telecommunications Corp, the information industry ministry said in a statement over the weekend.

China Telecom, an operator of fixed lines, will take over a mobile network of China Unicom, the smaller of the nation’s two key mobile phone operators, and most business of smaller player China Satellite Communications Corp.

The remainder of China Unicom will be encouraged to merge with fixed line operator China Netcom, according to the ministry.

The objective of the restructuring is to bring about three competitors of roughly comparable strength, the government statement said.

It is also aimed at redressing the imbalance between rapidly growing mobile phone operations and the fixed line business, which is actually seeing declines in subscriber numbers, it said.

Once the restructuring is finalised, the government will issue three licences for third generation (3G) mobile ser