Two small state-owned Chinese vendors, Datang and Potevio, are to merge by early next year, Chinese media has reported.
The merger is aimed at reducing the number of government-owned businesses and to boost the development of the local 3G standard TD-SCDMA, China Daily reported Thursday.
The merger is being driven by the State-owned Assets Supervision and Administration Commission of the State Council (SASAC), which manages China’s state-owned enterprises.
SASAC had considered merging the two companies in 2007, but put this on hold as sales picked up for both companies when Chinese carriers began to build 3G networks.
Now that those large-scale rollouts are being wound down, the two companies are struggling for growth. Both vendors make virtually all their sales within China.
Datang Telecom owns the government’s TD-SCDMA patents and also sells TD-based networks and semiconductors.