Dominant cellular carrier China Mobile (Hong Kong) has quietly built out a nationwide fixed-line backbone network while awaiting the granting of a full telecommunication licence by the industry regulator. A fixed-line network would enable the mobile carrier to compete with wired carriers on the domestic local voice and data access front. China Mobile management told analysts in a recent meeting the carrier had been developing its nationwide fixed-line network, including national Internet protocol (IP) backbone CMNet. The carrier leased lines within cities linking high-traffic base stations and even international bandwidth. 'As a large-scale fixed-line network has already been developed, we believe business opportunities in the fixed-line market exist to China Mobile, when regulatory conditions allow,' DBS Vickers Securities analyst Wallace Cheung said in his report after meeting the carrier's executive director and vice-president He Ning. In January, the then-minister of information industry Wu Jichuan said China was planning to develop four integrated telecoms carriers to provide a full range of telecoms services, ranging from local wireline services to cellular services to ensure sufficient competition in the industry. China United Telecommunications Corp Group, the parent of red-chip China Unicom, is the only fully integrated telecoms carrier on the mainland although it generates about 85 per cent of revenue from mobile services. China Mobile is the dominant cellular operator, and China United and China Netcom Corp Group offer wireless services in southern and northern China respectively. Investors had sold down China Mobile's shares following Mr Wu's comments because they were wary of the wireless carrier's earnings being dampened if it was forced to provide lesser wireless services, coupled with an expected increase in competition from fixed-line carriers with wireless licences. Despite China Mobile executives repeatedly insisting it would focus on the wireless business and was not interested in a fixed-line business, its aggressive build out of nationwide fixed network and IP backbone indicates the carrier is doing otherwise. China Mobile management told analysts at last week's meeting that these fixed-line networks were built to support rapidly increasing voice wireless network traffic and to make savings on leased line and interconnection costs. The mobile operator saw its interconnection fees, on a pro-forma basis, decrease by 1.5 billion yuan (about HK$1.4 billion) or 9.2 per cent to 14.84 billion yuan last year, while it recorded a 6.9 per cent or 440 million yuan saving in leased line fees last year.