China Telecom, the country's biggest fixed-line operator, which has acquired a mobile business as part of an industry-wide restructuring, expects Beijing to this year introduce further measures to promote competition in the world's biggest telecommunications market.

Wang Xiaochu, chairman and chief executive, said that he expected the government to announce various regulations in stages, including mandating the sharing of resources - such as networks and transmission towers - between China's three rival operators.

"We are not going to rely on the government to help us to develop our mobile business. But we would

like to see regulations on resource sharing to improve efficiency and fairer price competition . . . to benefit both operators and consumers," said Mr Wang.

China's wireless sector is dominated by China Mobile, which controls more than 70 per cent of the market and is signing up 7m users a month. Beijing has said the industry is suffering from a "serious imbalance in its competitive structure" and is keen to generate more competition.

In May, regulators reorganised the sector into three operators with both mobile and fixed-line businesses as a prelude to the introduction of third-generation (3G) mobile services.

They also began discussions on new regulations for the sector.

Analysts said that one of the most likely policy changes would be the introduction of number portability. China does not allow mobile users to take their existing phone numbers with them when switching operator, making it difficult for rivals to wrest customers away from China Mobile.

China Telecom may also have a technological edge over China Mobile, which this week admitted its homegrown 3G mobile technology was "a few years behind" other international standards because of problems with handsets.

As part of the industry restructuring, China Telecom has acquired the CDMA business of China Unicom, while Unicom, which also operates a wireless GSM network, bought fixed-line operator China Netcom.

China Telecom said yesterday it would "definitely" be the first of the three operators to launch 3G mobile phone services.

It aims to do so a month after receiving its 3G licence from industry regulators.

China Telecom yesterday reported a 4 per cent drop in first half net profit to Rmb11.6bn ($1.7bn).

Diluted earnings per share also fell 4 per cent to Rmb0.14.

source:FT