To date, code- division multiple access networks have not been that profitable. Why China Telecom, the nation’s biggest fixed-line phone company, thinks it can turn this one around.

China Telecommunications Corp., the country's biggest fixed-line phone company, will pay 110 billion yuan ($15.9 billion) for part of China United Telecommunications Corp.'s mobile-phone assets in a government industry revamp.

China Telecommunications will buy China United's code- division multiple access network for 66.2 billion yuan, and will pay 43.8 billion yuan for its subscribers, the fixed-line carrier said in a statement to the Hong Kong stock exchange today. Trading of the company's shares, suspended in Hong Kong since May 23, will resume tomorrow, the China Telecom said.

The price that China Telecommunications will pay for the CDMA business is in line with the $16 billion that Hutchison Essar Ltd., India's third-biggest mobile carrier, was valued at when it was acquired by Vodafone Group Plc last year. The fixed- line company, which is losing users to China Mobile Ltd., will enter the faster-growing wireless market as the government attempts to foster greater competition.

"The CDMA business is barely profitable, and should be priced at a discount to other emerging-market wireless operations," Francis Cheung, head of Asian telecommunications research at CLSA Ltd., said before the announcement. He expected China United's assets would sell for between 110 billion yuan and 120 billion yuan.

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