China Telecom in talks with foreign companies

China Telecom said yesterday it was in talks with five overseas telecoms groups interested in taking strategic stakes in the country's largest fixed-line operator.

China Telecom is the only big-four telecoms operator on the mainland that has not teamed up with a foreign company. Wang Xiaochu, chairman and chief executive, said the company would not pick a partner until it was granted a 3G mobile licence.

There is no rush for us to find a partner. Our value has not been fully represented because of the uncertainty over 3G, said Mr Wang, who declined to reveal with which companies China Telecom was in talks.

Foreign companies are eager to tap China - the world's largest mobile market-as they seek growth outside their saturated home markets.

Although they are only allowed to take minority stakes in Chinese telecoms companies, having a local partner could give a foreign operator better access to other telecoms projects in China.

SK Telecom, South Korea's top mobile company, this week announced the first alliance between an overseas operator and the Chinese government to help China develop its home-grown 3G standard, known as TD-SCDMA.

The news came two months after SK bought bonds convertible into a 6.7 per cent stake in China Unicom, the country's second-largest wireless operator.

Vodafone has a small stake in China Mobile, the top wireless operator. China Netcom's foreign partners are Hong Kong's PCCW and Spain's Telefonica.

Beijing is expected to issue 3G licences this year or early next year. Having a mobile licence would help China Telecom to regain growth momentum, especially after it announced its slowest half-year growth since 2002 as more people in China chose wireless phones over fixed lines.