Beijing has given the final green light to the long-awaited restructuring of China's telecommunications sector that will include a series of mergers to create three industry giants capable of providing a full range of services, the South China Morning Post reported on Friday.
Speculation that the revamp had been approved lifted shares of China Unicom by 7 percent and China Telecom by 6 percent on Thursday.
Top leaders in Beijing had put the finishing touches to the industry revamp at meetings last month and this month, the newspaper quoted unidentified sources as saying.
But UBS said in a report on Thursday that the restructuring was unlikely to happen before the Beijing Olympics in August and there was an increasing chance it could be delayed to 2009.
Under the plan, China Mobile, the world's biggest mobile telephone operator, would merge with the national railway's fixed-line unit, China Tietong, the newspaper said.
China Unicom's GSM mobile business would join with China Netcom Group while China Telecom Corp, the country's top fixed-line operator, would acquire Unicom's CDMA mobile telephone business.
China Netcom's shares rose 3.3 percent on Thursday, while China Mobile eased 1 percent amid fears of increasing competition in its lucrative cellular business.
The restructuring would also see a reshuffle of senior industry executives, with Xi Guohua, a vice minister of the Ministry of Information Industry, replacing China Mobile Chairman Wang Jianzhou, who would soon retire, the newspaper said.
China Telecom chairman Wang Xiaochu would be promoted to lead the Ministry of Information Industry and his post was expected to be assumed by Netcom's Chairman Zhang Chunjiang.
Chang Xiaobing, Unicom's chairman, was expected to lead the merged China Unicom GSM and China Netcom company, it added.
China Netcom and China Tietong officials declined to comment on market speculation.
A China Telecom spokesman said the company had not received any information regarding the restructuring.
China Mobile and China Unicom were not immediately available for comment.