An industry source reported recently that China Mobile (NYSE: CHL; 0941.HK) has submitted documents in hopes of inducing the Ministry of Industry and Information Technology (MIIT) to cancel "Document 686" and issue the operator a fixed-line network license.

"Document 686" refers to a memorandum issued by the MIIT in December 2009 stipulating that China Mobile would only be permitted to develop mobile broadband access services using its TD-SCDMA network, with fixed-line broadband service operations remaining the purview of China Tietong. A source at China Mobile said that although the operator had acquired China Tietong, government policy forbids China Mobile from investing directly in China Tietong's development of broadband infrastructure networks or from developing independent networks of its own. China Tietong's user-base is currently minuscule.

Industry insiders say that an entry by China Mobile into the fixed-line broadband market is only a matter of time, and that the government could relax restrictions on the operator as soon as this year.

Source:marbridgeconsulting