Shares of the mainland's big four telecommunications operators fell yesterday on concerns Beijing's restructuring of the industry will hurt earnings. Worst-hit were China Unicom, China Telecom Corp and China Netcom Group Corp, which resumed trading after being suspended since May 23. The revamp involves the creation of new full-service operators that offer mobile and fixed-line services. There is growing concern the restructuring will be costly, considering the investment required to develop new businesses in the mobile market where China Mobile reigns supreme. Unicom, the nation's smaller mobile-telephone operator, fell 14.07 per cent to HK$15.88. China Telecom, the nation's biggest fixed-line operator, slumped 12.7 per cent to HK$4.95. Netcom, which will merge with Unicom, dropped 12.75 per cent to HK$23.60. Shares of China Mobile, which has continued trading since the restructuring was unveiled, slid 2.21 per cent to HK$115. China Mobile, Unicom and Netcom, all Hang Seng Index constituents, yesterday contributed 144.32 points to the benchmark's 455.6-point slump. The index closed at 24,375.76 points. Analysts said that with details of the long-awaited reform released, investors had no reason to speculate on the stocks. '[The shares fell] due to profit taking,' CLSA analyst Francis Cheung wrote in a research note. Unicom, which will sell its CDMA business to China Telecom and merge with Netcom, had been downgraded by Credit Suisse and Morgan Stanley on worries Unicom paid too high a premium to gain full control of Netcom. 'Unicom's valuation after the [sale] of its CDMA business is not cheap, as the stock trades at 25 times its earnings,' Morgan Stanley analyst Navin Killa wrote. 'It could limit the medium-term upside.' Market watchers said China Telecom, which will acquire the CDMA business and its subscribers from Unicom for 110 billion yuan (HK$124 billion), also paid too high a price, given the limitations of the technology. Citigroup said the acquisition price was 10 per cent above consensus. China Telecom told analysts it aimed to have more than 100 million CDMA subscribers in three years. But the aggressive target means the firm will need to invest more in marketing to increase its monthly net additions of CDMA customers to more than 1.5 million, from only 300,000 now. 'China Telecom has the most execution risk after the completion of restructuring,' Goldman Sachs analyst Helen Zhu wrote yesterday. 'CDMA's unfavourable economics, such as higher handset prices, have made it difficult for it to gain a head-start over GSM in price-sensitive emerging markets. 'The business could only contribute 4 per cent to 5 per cent of earnings before interest, tax, depreciation and amortisation in the coming two to three years.'