"The new carriers, especially China Telecom, have rich resources of enterprise clients and FMC will challenge market leader China Mobile," said CCID's Lu.

To consumers, packed FMC services have great cost advantage as well as the convenience of the service, Lu added.

China Mobile, which acquired China Tietong's fixed-line business, will also quicken the pace of the broadband network coverage, which can be integrated with its strong mobile business, said Sandy Shen, an analyst at US-based Gartner Inc.

"China Mobile has considerable capital flow and fiber optic cables, which provide much faster online surfing experience than China Telecom's and China Netcom's services," Shen said during a phone interview.

Industry insiders said the new China Telecom and the new China Unicom have an opportunity, for one to two years, to catch up with China Mobile.

"China Mobile's dominant position is unlikely to change at least within the next one to two years," said Li Jinqing, analyst at Fitch Ratings. "With an ability to internally fund large and increasing levels of capital expenditure on its network, China Mobile sits in a better position compared with its competitors."

The 3G licenses are another area of considerable interest and it is believed they will be issued after the reorganization.

"The easy and convenient wireless Internet access will become the killer application then. The carriers have to construct Wi-Fi hot spots, along with 3G network, as quickly as possible," said Lu.

In Shanghai, the number of wireless hot spots will exceed 3,600 by the end of this year.

(Shanghai Daily June 6, 2008)