May 29 - China moved on Tuesday to realign their telecom industry, hoping to promote competition in an industry that has become increasingly monopolized by China’s mobile operators.

Under the plan, China’s six state-owned telecom companies will be merged into three. China Mobile, will acquire the fixed-line operator China Tietong Telecommunications Corp, while China Telecom will take over one of China Unicom’s mobile networks, and most of the business of smaller player China Satellite Communications Corp.

The remainder of China Unicom will be encouraged to merge with fixed-line operator China Netcom, according to the Ministry of Industry and Information Technology.

China’s current telecom industry is dominated by China Mobile, the world’s largest mobile provider and accounting for 400 million of the country’s 583.5 million mobile phone users worth some US$105 billion. China’s fixed-line providers, in comparison, have seen their customers drop off, losing 2.3 million people last year alone.

Following the consolidation, China Mobile is expected to have a total of 399 million users; China Telecom will have 297 million; and China Unicom will count 256 million, according to China Daily.

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