SHANGHAI, April 7: The parent of China Mobile (Hong Kong), the country's top cellphone operator, plans to set up a new subsidiary to run the third-generation wireless network, state media reported on Saturday.

The new unit would mainly be in charge of the construction and layout of China's homegrown TD-SCDMA (Time Division Synchronous Code Division Multiple Access) standard, according to a report published on the official Xinhua news agency's Web site.

The plan is aimed at avoiding issues over the origin of the large sums of capital being invested in TD-SCDMA, the news report said, citing an unidentified industry source.

Having parent company China Mobile, rather than its Hong Kong-listed unit, oversee the large amounts of capital flowing into TD-SCDMA projects meant the National Development and Reform Commission would be better able to steer the scale and direction of investment and support the project, the report added.NDRC is China's top economic planner and is working with ministries to design the country's 3G strategy.

The tender for contracts to build the country's high-speed TD-SCDMA network has risen to 26.7 billion yuan from 18 billion yuan, mainly due to rising prices for equipment, Xinhua said.

It added that the TD-SCDMA network would then be leased out to Hong Kong-listed China Mobile.

The results of China Mobile's tender for contracts to gear makers to build TD-SCDMA contracts are also expected to come out at the end of April, the report said.

China's 3G rollout -- now expected later this year or early next year by most analysts -- has been pushed back for years.

—Reuters