CHINA Unicom, the country's second-biggest provider of mobile-phone services, says it is studying plans to integrate its fixed-line business with similar assets held by shareholders.

The proposal is part of Unicom's plan to set up a "unified national network" of fixed-line and wireless businesses, the Beijing-based company said in a statement to the Hong Kong stock exchange.

Discussions are at a preliminary stage and may not result in a transaction, the carrier said yesterday.

Unicom last month bought China Netcom Group Corp, the dominant fixed-line service provider in 10 northern Chinese cities and provinces, including Beijing and Tianjin, as part of a government plan to let carriers offer wireless and traditional phone services. The company may need to gain landline assets in southern provinces to broaden coverage, analyst Kevin Tam said from Hong Kong.

"As the company plans to offer both mobile-phone and fixed-line services, it needs to get a foothold in southern China," Tam, who rates Unicom shares "sell" at China Everbright Research, told Bloomberg News.

Unicom purchased China Netcom in a stock-only transaction, paying 1.508 new shares for each of the fixed-line carrier's, valuing the acquisition at HK$123.9 billion (US$16 billion). The deal gave China Network Communications Group Corp, previously China Netcom's controlling shareholder, a 30.4-percent stake in Unicom.

China Network owns fixed-line units in southern provinces, according to China Netcom's listing prospectus in 2004. China Telecom Corp is the dominant operator in most of southern China, controlling 21 provinces and regions.