China's telecommunications ministry criticized the country's two biggest fixed-line phone operators for expanding a cordless-phone service using a cheaper version of Qualcomm Inc's technology.
China Telecommunications Group Corp and China Netcom Communication Group Corp must dismantle cordless-phone systems using the 450MHz variant of code-division multiple access technology under a ministry order, said Li Haiqing, director of the ministry's frequency planning division.
"That type of system isn't widespread in the country," Li said in an interview, declining to name provinces where systems have to be removed.
"They are found perhaps only in some peripheral districts."
The order doesn't affect China Telecom and China Netcom's Little Smart, a limited-range intracity cordless system used by more than 10 million people.
Little Smart, which uses the 1,900MHz spectrum, charges users a fraction of regular cellular service, attracting people who can't afford services offered by China Mobile Communications Corp and China United Telecommunications.
Shares of China Telecom Corp, a unit of China Telecom, fell 2.1 percent to HK$1.40 at 11:59am in Hong Kong. Shares of China Unicom Ltd., a unit of China United, rose 0.5 percent to HK$4.90.
Stock of China Mobile (HK) Ltd was unchanged at HK$17.35.
Wu Jichuan, who retired as telecom minister last week, said this month the government won't encourage, nor interfere with, Little Smart's expansion. China Telecom plans to offer Little Smart in Guangzhou, and China Netcom in some suburbs of Beijing.
Last year, the Ministry of Information Industry said China won't use the 450MHz variant of CDMA because the frequency spectrum is limited and radio signals could interfere with calls.
Lucent, the largest US maker of phone equipment, and Huawei Technologies Co, China's largest, lobbied the government to adopt the standard because they're the top makers of the required network equipment.
China United received a copy of the notice from the regulator, confirmed China Unicom spokeswoman Sophia Tso.
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