By staff reporter Ming Shuliang

China announced a restructuring plan for the country's telecom operators May 24, advancing the release of the long-awaited 3G (third-generation) mobile licenses.

The plan encourages the fixed-line operator China Telecom to buy China Unicom's code-division multiple access (CDMA) network. The remnants of China Unicom, mainly its GSM network, are expected to be merged with China Netcom, according to the statement jointly issued by the Ministry of Industry and Information Technology, the National Development and Reform Commission and the Ministry of Finance.

"We encourage China Telecom to combine the basic telecom services unit of China Satcom and China Mobile to buy China Tietong," the statement also said.

The telecom operators were asked to submit formal restructuring plans as soon as possible to the appropriate departments. The first batch of 3G licenses will be issued once restructurings are settled.

"Three 3G licenses would be issued to help create three competitive phone companies that have telecom resources nationwide, near equal strength and scale, and can offer both mobile and fixed-line services," the statement noted.

Analysts expect the major difficulty in the restructuring to be China Telecom's takeover of China Unicom's CDMA network. Discussions have so far failed to produce a price agreement.

Talks between China Telecom and China Unicom on merging operations and disposing of businesses have reportedly been restarted May 26. Analysts expect the latest statement to coax an agreement between the two companies.

The restructuring would help optimize resources and create a market without monopolies, excessive competition and overlapping construction, according to the statement. 　

The announcement tailed a confirmed merging between China Mobile and fixed-line operator China Tietong, and a slew of personnel changes on May 23, all seen as a sign of a major industry overhaul.

The long awaited telecom restructuring plan was expected as early as May 17. However, when the devastating earthquake jolted southwest China on May 12, the issuance was postponed.

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