China Telecom is eyeing to buy China Unicom's CDMA network in order to prepare for the issuance of 3G licenses in the country, according to local media reports.
The Hong Kong Economic Journal a Chinese newspaper, did not name sources, but noted that rumors about the possible sale of Unicom's CDMA network have been circulating for some months.
The paper quoted a source close to China Telecom as saying that the company has not received any official notice regarding the purchase, but neither did it deny that talks are being held.
Another Hong Kong news agency, XFN-Asia, meanwhile quoted Andrew Sullivan, head of sales trading at Daiwa Securities SMBC Hong Kong, as saying that China Mobile stands to benefit in a significant way if China Telecom's rumored bid for China Unicom's CDMA network materializes.
The analyst also said China Unicom will see its subscriber base shrink significantly, as management could benefit from not having to run two incompatible networks.