China Mobile confirmed today that regulators in Taiwan have approved plans for it to set up a wholly-owned unit in the country, reports Dow Jones Newswires. The development has raised hopes that China Mobile may soon be able to resurrect plans to buy a 12 percent stake in local mobile firm, Far EasTone. China Mobile – the world’s largest mobile operator – announced a TWD17.77 billion (US$567 million) deal to buy the stake in April 2009 but saw its move blocked due to Taiwan’s ban on Chinese firms investing in its telecoms sector. However, China Mobile said today it hopes the Taiwan government will relax the island’s investment rules, and will seek approval for its planned investment in Far EasTone when the rules allow.

The new Taiwanese business unit – known as Zong – is likely to strengthen existing ties between China Mobile and Far EasTone. The two firms recently signed a memorandum of understanding (MOU) that will see them jointly build a test network based on TD-LTE technology in Taiwan. The two firms said that the partnership will help local telecoms equipment suppliers, chipmakers and end product manufacturers test their products in the TD-LTE lab prior to commercialisation. China Mobile has long seen Taiwan as a test-bed for TD-LTE, the next-generation technology chosen to succeed its homegrown TD-SCDMA-based 3G network in China.