merging business in hong kong

HONG KONG, Oct 25 (Reuters) - New World Development Co. Ltd.

<0017.HK> is in talks to merge its mobile phone unit New World

Mobile Holdings Ltd. <0862.HK> with Hong Kong carrier CSL, which

is controlled by Australia's Telstra Corp. , a Hong Kong

newspaper reported on Tuesday.

The Apple Daily quoting an unidentified source as saying the

two companies' parents were discussing the pricing and structure

of a possible tie-up.

The paper said details could be announced in November at the

earliest. It gave no further details.

A spokesman for Telstra, Australia's largest phone company

and which is due to make a public offering late next year, said

he would not comment on market speculation.

"CSL remains Hong Kong's most profitable operator. Telstra

and CSL continue to leverage off each others' experience,"

spokesman Warwick Ponder said.

Telstra's new chief executive, Sol Trujillo, has not ruled

out selling parts of the 51.8 percent-owned government company,

saying nothing is sacred. He is due to announce results of a

strategic review of the company in mid-November.

It would be the third merger among telecommunications firms

in the fiercely competitive Hong Kong market in the last five

months, following PCCW's <0008.HK> $249 million takeover bid for

Sunday Communications Ltd. <0866.HK> in June, and China Mobile

(Hong Kong) Ltd. <0941.HK> buying control of China Resources

Peoples Telephone Co. Ltd. <0331.HK> in October.

PCCW, Hong Kong largest fixed line operator, had in 2002 sold

its stake in Regional Wireless Co., which includes Hong Kong

carrier CSL, to its joint venture partner Telstra for $614

million to reduce its debt.

Shares of New World Mobile have soared 143 percent over the

past three months to trade at HK$2.45 on Tuesday.