China Unicom, the country's second-largest mobile phone operator, had no intention to sell or transfer its network and had not been in talks with other telecommunications firms to do so, Xinhua reported Friday.

"China Unicom has never had the intention to sell or transfer its mobile communications network, and has never held talks on the matter with any major telecommunications operator," Xinhua quoted a Unicom spokesperson as saying.

Wang Xiaochu, China Telecom chairman, said Thursday he had proposed to regulators to join with fixed-line rival China Netcom to buy one of the two cellular networks operated by China Unicom.

Wang’s remarks fuelled widespread speculation of an imminent government-orchestrated restructuring of the Chinese telecom market, the world's largest in terms of subscribers.

China’s telecom industry is dominated by four big carriers — two focused on fixed service and two on mobile.

Speculation over an industry restructuring has been rife in recent months as China prepares to outline plans to build third-generation (3G) cellular networks.

Some market observers have worried that if China issues four nationwide 3G licences, it will impose a heavy capital spending burden on the smaller carriers and spur intensified competition.

China Unicom operates two nationwide cellular networks, one using the U.S.-developed CDMA technology and the other using the older GSM technology that predominates in Europe and is used by China Mobile, the country’s largest mobile phone operator.

Some investors and analysts have long complained that China Unicom is competing with itself by running two networks.

Last week, China’s State asset regulator said it was considering reforms to improve the values of its telecom carriers and avoid duplicating investments, but denied that a breakup of Unicom was imminent.

A network sale by Unicom, however, would reduce the pressure on China Telecom and China Netcom to build quickly new nationwide mobile networks if they were granted licences to operate 3G services, analysts said.

(Shenzhen Daily February 7, 2005)