China Telecom Corp will partner American CDMA technology developer Qualcomm to develop the mobile-telephone business it will acquire from China Unicom, according to a mainland media report. The nation's largest fixed-line operator formed a strategic partnership with Qualcomm recently to use the latter's CDMA technology, the Shanghai Securities Daily reported yesterday. Under a restructuring plan for the mainland telecommunications industry, China Telecom is expected to pay about 100 billion yuan (HK$112.39 billion) for Unicom's mobile network assets and subscriber base. As the owner of CDMA technology, Qualcomm will charge China Telecom a royalty fee for the service. 'Their co-operation may involve the royalty fee or other value-added service-platform development,' an industry analyst said. A Qualcomm spokesman declined to comment yesterday. The company appeared to have adopted a wait-and-see position over a potential partnership with SK Telecom, a South Korean mobile operator that is now Unicom's CDMA partner. 'China Telecom is strong enough to launch mobile services and the company is not that actively responsive to an alliance with SK Telecom,' an industry watcher said yesterday. The acquisition of the CDMA network from Unicom will allow China Telecom to offer bundled services of fixed-line and mobile connectivity. The market has predicted China Telecom will pay between 89.9 billion and 103.5 billion yuan for that. It is expected to pay 39.9 billion to 43.5 billion yuan for the CDMA subscriber base and business operations owned by Unicom's listed company. China Telecommunications Group, the parent of China Telecom, was expected to acquire the CDMA network assets from China United Telecommunications, the parent of Unicom, for between 50 billion and 70 billion yuan, analysts said. At the end of April, Unicom had 44 million CDMA subscribers. Brokerage Macquarie estimated that China Telecom could acquire each CDMA subscriber for US$217. It expected the CDMA business to increase in value by 30 per cent under China Telecom's management. 'We believe the company will use a combination of cash and borrowings to pay for this acquisition,' Lehman Brothers wrote in a research report. As of the middle of last year, China Telecom had about 17 billion yuan in cash on its balance sheet. The Lehman analysis assumed that China Telecom 'will not raise cash through an equity offering to pay for an acquisition'. Shares of Unicom, China Telecom and China Netcom Group Corp are suspended from trading, pending further details of the restructuring. China Mobile shares have retreated for five consecutive sessions, closing down 1.57 per cent at HK$112.90 yesterday. Market sources said shareholding details would be announced in two weeks. Analysts speculated that China Telecom would unveil its CDMA asset purchase this week.