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China Netcom, the country's second largest fixed-line operator, said it was certain it would secure a third generation mobile licence when they are awarded by Beijing, expected this year.

Edward Tian, chief executive, insisted there was ?no possibility? Netcom would miss out on winning one of an expected three licences an outcome that would virtually guarantee the group's long-term future as a stand-alone entity in the country's soon-to-be reshuffled telecommunications industry.

?We will get a mobile licence, period. But are we going to get a nationwide licence or provincial licence? What conditions and policies are associated with the licence? The questions are timing and how.? China's telecoms industry is expected to undergo major restructuring this year ahead of the planned introduction of advanced 3G mobile networks.

The sector is dominated by China Mobile and China Unicom, the number one and number two cellular operators, as well as Netcom and its larger fixed-line rival, China Telecom.

Most analysts predict the reorganisation will lead to a break-up of China Unicom. China Telecom has proposed teaming up with Netcom to buy Unicom's GSM network, although the proposal has been dismissed by Unicom.

While Beijing has shed little light on the expected reshuffle, a Chinese industry executive told the Financial Times the central government was likely to finalise details of the restructuring in two months and award three 3G licences by end of the year.

The executive also said Unicom, which also runs a network based on US's CDMA standard, could be merged with China Netcom after selling one of its cellular networks to China Telecom.

But the executive warned that the central government, which will make the final decisions, had not made up its mind on the timing or details of the restructuring and there were no talks between the operators on network acquisitions.

Any acquisitions would also need shareholder approval, as all four operators are listed overseas.

Mr Tian declined to comment on whether Netcom, which raised US$1.13bn in November last year in Hong Kong and New York in an initial public offering, would merge with Unicomor acquire any mobile networks to speed up the implementation of its own 3G services.

?I am not the kind of person who spends a lot of time guessing about rumours.

?My focus is on using one of our main strategies, which is broadband, as well as other measures, such as cost-cutting, to grow the business,? he said.

While Mr Tian was certain Netcom would receive a 3G licence, which would bring an end to Xiaolintong, its unofficial, limited wireless network, he said the company had not yet decided how to migrate users of this service to 3G.

?You cannot run two networks. One company, two systems, is a disaster.?

Copyright The Financial Times Limited 2017. All rights reserved.
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