China Netcom, full name China Netcom Corporation Limited (CNC), was originally formed in August 1999 to build high speed Internet communications in China. It now offers a variety of wireline telecommunication services in the People's Republic of China.
It is widely seen as the number two fixed-line operator in China after China Telecom, and operates a semi_mobile PAS or xiaolingtong system.
Talk of industry restructuring has persisted for years and run the gamut from rumours that Netcom would combine forces with Unicom, to speculation that Unicom would be split and hived off to fixed-line rivals sporadic hints of which have moved the carriers' stocks in the past year.
Netcom shares were up more than 4 per cent in early afternoon trade, outperforming a 1.2 per cent gain in the index of Hong Kong-listed mainland firms.
Netcom and bigger rival China Telecom are looking to non-voice services such as broadband Internet and Internet television to drive growth.
ChinaNetcom, the product of a recent deregulation by the Beijing government, may want to route traffic over the fiber-optic network of the company.
ChinaNetcom serves the north, including Beijing, but its fixed-line assets are worth less than those in the industrial south, controlled by China Telecom.
Other sources tell CNN that ChinaNetcom is likely interested in viewing the books of the telecommunications company and may still walk away from any deal.
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