Besides, Chan said, "all the mainland's telecom players are (raising money) to secure a better position to prepare for the issue of 3G licences."
He also said China Tietong has little chance of being acquired by a larger rival because it serves a unique group of users.

China Tietong earned 12.9 billion yuan (US$1.6 billion) in revenue from January to October. The figure is expected to reach 15.5 billion yuan (US$1.94 billion) for the whole year, representing a year-on-year increase of 15 per cent, Zhao said.

Its subscribers of fixed-line and broadband services in China will grow to 20 million and 2.97 million by the end of the year, up 32 per cent and 50 per cent on an annual basis.

China Tietong is expected to see a 5 per cent growth rate annually in earnings from railway customers in the next five years, Zhao said.

His confidence was largely based on the increasing mileage of the mainland's railways, which will amount to 87,000 kilometres by 2010 and 100,000 kilometres by 2020, up from the current 75,000.

As for the long-awaited third-generation (3G) mobile business, Zhao said he hopes to see the Ministry of Information Industry issue 3G licence "as soon as possible."

Mainland telecom companies have been expecting the government to give the green light to 3G mobile for five years. When it happens, the move is expected to generate more than US$10 billion in spending on equipment while stimulating further growth in the mainland's maturing mobile market.

Repeated delays, however, have made firms inpatient, especially fixed-line operators such as China Telecom and China Netcom, which are expecting 3G operations to save them from slowdowns in the telephone business.

China Tietong, which has 19.2 million fixed-line users and 2.83 million broadband subscribers, is also eager for the licence, because "it will definitely create a fresh revenue source."

Analysts generally believe the mainland's big-four telecom firms China Mobile, China Unicom, China Telecom and China Netcom may get the first batch of 3G licences.

But China Tietong has also been picked by the Ministry of Information Industry to conduct WCDMA and TD-SCDMA trial runs in Beijing and Shanghai.

"We could co-operate with 3G operators after the licences are issued if we are not in the first batch," said Zhao, adding China Mobile would be the "most ideal partner."

"China Teitong has completed and unified its national networks and China Mobile is the mainland's largest mobile carrier ... our future co-operation will unleash huge synergy," Zhao said.

Its 3G test results are good in terms of coverage and various technological standards and have met the requirements of commercial use of the 3G standards, he said.

1

2

(For more biz stories, please visit Industry Updates)