China pressed ahead with a restructuring of its telecommunications market as mobile phone company China Unicom announced plans to take over a fixed-line provider and sell off a mobile business, an Associated Press report said.
The country's No. 2 mobile operator said it would aquire China Netcom Group in a share swap valuing the fixed-line operator at €15.3 billion (US$23.8 billion). That represents a 3% premium over Netcom's last closing share price, the Reuters report said.
Separately, China Unicom and its parent said they would sell CDMA mobile network and accompanying business to China Telecom and its parent for 110 billion yuan €10.1 billion (US$15.86 billion).
China Telecom is the country's biggest fixed-line operator.
The moves were expected as part of a government-mandated shake up of China's telecommunications sector unveiled late last month. That plan called for the country's six telecom companies to combine into three groups in a bid to create a more competitive industry and prevent a dominant operator from monopolizing the market.
The deals could help China Unicom and China Telecom compete with the country's cell phone heavyweight, China Mobile, the world's largest mobile provider by subscribers.
China Telecom could expand its new mobile business with its current fixed-line customers; China Unicom could grow its current mobile business with the new fixed-line subscribers.