The State-owned Assets Supervision and Administration Commission (SASAC) is expected to transfer about 50 bln yuan from China Mobile Group to China Unicom Group to boost Unicom's working capital, Sina.com reported, citing unnamed sources.

According to the report, Unicom would then transfer part of the sum to China Telecom as an 'interconnection settlement' to ease Telecom's financial pressure as it purchases Unicom's CDMA wireless network.

SASAC is the main shareholder of China Mobile Group, China Unicom Group and China Telecom Group.

Under the state-sponsored restructuring of the country's telecom industry, fixed-line operator China Telecom will pay 110 bln yuan to buy Unicom's CDMA wireless network, becoming a full-service operator.

Unicom, which retains its GSM wireless network, is merging with the other big fixed-line operator, China Netcom.

In July, China Telecom said it planned to issue up to 50 bln yuan of 10-year bonds to supplement its working capital and update its equipment.

The government is expected to implement 'asymmetric regulations' to allow China Telecom and China Unicom to consolidate their new status as full-service operators and compete effectively with China Mobile, which enjoys a huge lead in wireless services.

(1 usd = 6.81 yuan)

 Source:XFN-ASIA