China to push telecoms overhaul in 2008 -Xinhua

HONG KONG, Dec 28 (Reuters) - China will push a long-waited reshuffle of the country's telecoms industry in 2008, creating players that operate both wireless and fixed-line services to address unbalanced competition, state media cited the country's top telecoms regulator as saying.

An overhaul of the sector, dominated now by four players that have evenly split mobile and traditional fixed-line services licenses between them, is also expected to precede the issuance of licenses to offer faster third-generation services, which will represent a boon for equipment vendors such as Motorola (MOT.N).

Industry sources have speculated for more than a year that Beijing intended to split up China Unicom's (0762.HK) wireless networks and hand them off to fixed-line players China Telecom (0728.HK) or China Netcom (0906.HK). But that, and other proposals have been dogged by infighting and local interests, the sources say.

Now, Beijing realises that full-service players serve the industry's best interests, the Xinhua News Agency reported.

China Telecom, defying the market's slide on Friday, climbed nearly 2 percent in the morning, though Netcom -- which some analysts fear may lose out in any sector revamp because it lags its rival in market share -- slid 1.5 percent.

China Mobile slid 1.2 percent, reflecting Asian stock market weakness after the assassination of Pakistani opposition leader Benazir Bhutto, which some fear will spur regional instability.

"Operating a single type of business not only goes against technology trends, it has also fostered serious imbalances in the telecoms industry's development," Minister for Information Industry Wang Xudong was cited as saying by Xinhua news agency late on Thursday.

"A full-service business model is now the telecoms industry's most reasonable one."

Shares in mainland fixed-line telecom operators had surged since the beginning of this week after Xinhua reported separately that the firms would get licenses for mobile services "at an early date".

The Xinhua report, published over the weekend, quoted an official from China's Ministry of Information Industry and suggested that long-awaited industry restructuring would start soon. (Reporting by Edwin Chan, editing by Ken Wills)