BEIJING, Nov 19, 2007 (AFP) - A pledge by China's regulators to let fixed-line phone operators enter the faster-growing mobile market could lead to much greater competition in the telecom industry, analysts said Monday.

Vice Minister of Information Industry Xi Guohua used a forum in Beijing over the weekend to announce plans by the government to grant licences to fixed-line telecom operators soon, the Xinhua news agency reported.

"The rapid development of mobile telecom services had lured away subscribers of fixed-line services," Xinhua said, citing Xi. His ministry confirmed the remarks to AFP Monday.

Fixed-line operators welcomed the news, but said they still needed to know more before popping the champagne.

"We're still looking for a timetable," said Qin Shaojuan, a spokesman for China Netcom, one of the two large fixed-line operators in China. "But if they really are going to give a licence, that's extremely good news for us."

The vice minister's remark followed months of speculation that the government was considering ways to restructure an uneven telecom market, where mobile is as hot and vibrant as fixed-line is stagnant.

"Fixed-line operators are facing immense pressure," said Kang Zhiyi, a Beijing-based analyst with TX Consulting. "Whether you look at revenue or profit growth, the difference with the mobile segment is large."

China Telecom Corp., the nation's top fixed-line operator, said late last month its net profit for the first nine months was little changed from a year earlier amid continued competition from cellphone providers.

By contrast, China Mobile Ltd., Asia's biggest mobile phone company, said its net profit for the same period grew nearly 30 percent, buoyed by strong subscriber growth and a wider rural reach.

The difference in corporate fortunes reflect broader forces at work in the Chinese market.

The number of mobile phone users in China was 523.3 million at the end of September, up 13.5 percent from the end of 2006, according to official data. The government expects the number to rise to 540 million by the end of 2007.

The number of fixed-line users in China was 371.7 million, a rise of 1.1 percent from late last year.

In reaction to the Vice Minister's Xi's remarks, shares in China Telecom rose 4.0 percent in early trade Monday in Hong Kong, while China Netcom, the other major fixed-line operator, gained 4.7 percent.

A restructuring of the industry would come at a crucial time as the market is preparing for the arrival of third-generation mobile telephony, or 3G, as opposed to the currently dominant 2G.

3G allows various more advanced functions, including the use of broadband wireless data via mobile devices.

No detailed information was available from the government on how it planned to allow China Telecom and China Netcom to become involved in mobile operations.

Unconfirmed media reports have suggested that China Mobile's smaller rival, state-owned mobile carrier China Unicom, could be split up between China Telecom and China Netcom.

"Dividing China Unicom could be a way to do it," said Jiang Lifeng, an analyst with CCID Consulting based in Beijing.

"China Unicom has two networks, but in itself, it's not a very strong player, so splitting its assets could help reinvigorate the competition in the market," he said.