China's top leaders are reviewing a proposal to merge state-owned mobile carriers China United Network Communications Ltd. and China Telecom Corp. Ltd., Bloomberg News reported, citing sources familiar with the matter.
The proposal reportedly contends that a China Unicom-China Telecom merger could accelerate government investments in 5G, especially since China is in a race with the U.S. in developing the wireless technology. However, no decision has been made.
The Chinese government has been considering combining the two mobile operators for years, but the country's escalating trade spat with the U.S. has made the matter more urgent, according to the report.
Combining China Unicom with China Telecom would reportedly result in an entity with more than 590 million mobile subscribers, making it a runner-up to China Mobile Ltd., which has more than 900 million subscribers. It may, however, prove problematic for recently listed China Tower Corp. Ltd., which has a business model that relies on a high number of carriers, according to Bloomberg News.
China Tower's state-backed operators are China Unicom, China Telecom and China Mobile.
Earlier reports said China is gaining an edge over the U.S. in the long term with regards to 5G development, given the breadth of its programs and its set-aside in the 3 GHz-4 GHz spectrum band.