China Unicom, the smaller of the mainland's two mobile-telephone operators, was likely to team up with a Hong Kong fixed-line company when it submitted a bid for a third-generation mobile licence in the city next week, sources said. China Unicom was in talks with Wharf T&T, a unit of conglomerate Wharf (Holdings), and Hong Kong Broadband Network, owned by City Telecom (Hong Kong), on a joint bid with either party and was awaiting board approval, the sources said. Hutchison Telecom, which already owns a 3G licence, was also studying whether to bid with China Unicom or by itself, the sources said. Hutchison Telecom's second-generation mobile licence based on the code-division multiple access standard (CDMA) expires in November next year. The Office of the Telecommunications Authority will sell it as a 3G licence in an auction this year. The auction is expected to be held as soon as the end of this month with a minimum bid of HK$76 million. The regulator will accept bid applications next Thursday and Friday. 'China Unicom is in negotiations with several interested parties to jointly bid for the licence as the company is the mainland's only CDMA operator,' a source said. China Unicom was expected to invest as much as HK$2 billion to set up 1,200 to 1,300 cell sites so that its network could cover the entire city, the source said. Hong Kong's fixed-line operators are eager to tap the wireless market as more people are using only mobile phones. 'A new licence will enable fixed-line operators to challenge PCCW and Hutchison Telecom, the city's only two operators in Hong Kong capable of offering both fixed and mobile services,' an industry source said. China Unicom, Wharf T&T and Hong Kong Broadband Network declined to comment. Sources close to Hutchison Telecom said the company had not actively prepared for a bid. 'However, Hutchison will be the only operator that can meet the roll-out [requirement] right away as it can easily upgrade the existing CDMA network,' a former executive at a local operator said. The government will require the new licence-holder to achieve coverage in urban areas as well as main rail networks such as the MTR and Airport Express when the service rolls out in November next year.