June 2 (Bloomberg) -- China Telecommunications Corp., the country's biggest fixed-line phone company, will pay 110 billion yuan ($15.9 billion) for part of China United Telecommunications Corp.'s mobile-phone assets in a government industry revamp.

China Telecommunications will buy China United's code- division multiple access network for 66.2 billion yuan, and will pay 43.8 billion yuan for its subscribers, the fixed-line carrier said in a statement to the Hong Kong stock exchange today. Trading of the company's shares, suspended in Hong Kong since May 23, will resume tomorrow, China Telecom said.

The price that China Telecommunications will pay for the CDMA business is in line with the $16 billion that Hutchison Essar Ltd., India's third-biggest mobile carrier, was valued at when it was acquired by Vodafone Group Plc last year. The fixed- line company, which is losing users to China Mobile Ltd., will enter the faster-growing wireless market as the government attempts to foster greater competition.

``The CDMA business is barely profitable, and should be priced at a discount to other emerging-market wireless operations,'' Francis Cheung, head of Asian telecommunications research at CLSA Ltd., said before the announcement. He expected China United's assets would sell for between 110 billion yuan and 120 billion yuan.

The deals are part of the government's planned reorganization of the $105 billion telecommunications industry announced on May 24, allowing fixed-line carriers to expand into wireless services and creating three operators offering phone and Internet connections to the nation's 1.3 billion people.

Newbury, England-based Vodafone, the world's biggest mobile- phone company, paid $10.7 billion to buy 67 percent of Hutchison Essar, now re-named Vodafone Essar, in May 2007. The Indian carrier had 45.8 million users at the end of April, according to government data. China Unicom had 43.1 million CDMA users at the end of April.

China Unicom's CDMA business had a pretax profit of 1.2 billion yuan last year, compared with 1.06 billion yuan in 2006.

To contact the reporters on this story: Janet Ong in Beijing at jong3@bloomberg.net; Mark Lee in Hong Kong at wlee37@bloomberg.net

Last Updated: June 2, 2008 05:20 EDT