Chinese ops call truce

As perhaps another precursor to China’s licensing of 3G, the country’s two fixed line operators have reportedly signed a ‘no competition’ agreement.

The agreement, signed by China Telecom and China Netcom, will reduce the duplication of infrastructure and overlapping state resources.

China Telecom, the larger of the two companies, operates a fixed line network in the central and southern provinces, while Netcom operates in the north.

The move follows strong rumours that China Unicom, the country’s smaller mobile operator, may be broken up. Unicom’s GSM operation is expected to go to Netcom, with the cellco’s CDMA network being either bought or leased by China Telecom.

As a result, Netcom would likely get a WCDMA licence and Telecom would get a cdma2000 licence, when China allocates 3G spectrum.

China Mobile, the country’s biggest operator, which runs a GSM network, is currently running a large scale trial of the homegrown 3G platform TD-SCDMA and is likely to get a TD-SCDMA licence.

Last week, Netcom reportedly said that it is not interested in building a network based on TD-SCDMA and is instead angling for an upgrade path to WCDMA.