The State-owned Assets Supervision and Administration Commission of the State Council of China has decided to directly allocate CNY50 billion from China Mobile (CHL) to China Unicom (CHU) to reduce China Telecom's (CHA) pressure in buying the CDMA network of China Unicom while supporting the wireless network construction of China Unicom.

A representative from China Mobile told local media that the allocation was already decided during the restructuring of China's telecom industry. The CNY50 billion will be allocated to China Unicom and it also includes an undisclosed large sum that belongs to China Telecom. It will cost China Telecom CNY110 to take over the CDMA network of China Unicom and the funds will help to reduce the financial pressure of China Telecom. So China Telecom will benefit by this movement of funds.

Representatives from China Unicom also confirmed that the company has released an internal notice about this decision and the reason for this decision is reportedly because of the cash shortage of China Telecom in completing the CDMA network deal in China.


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