(Yicai Global) Sept. 5 -- The two Chinese wireless carrier giants said to be at the center of possible government plans for a mega-merger in the sector have denied any knowledge of the matter.

China United Network Communications,betterknown as China Unicom,said online yesterdayithadnoted reports about theallegedmerger with China Telecommunications, but is unaware ofthe situation andhasreceivednonotice to that effect. China Telecompersonnel likewisedisclaimedany awareness ofthe matter,state media ThePaper reported.

The country's topbrass ismulling a combinationofChina Telecom and China Unicom,two of the three state-run telecom titans,tohastendevelopment of fifth-generation communications, or 5G, but have not yetcome to afinal decision, Bloomberg reported yesterday, citing unidentified people familiar with the matter.

There has been speculation over a number of years about a possible union of the pair, with local media reporting denials from both just last month.

Shares of the Beijing-based companies surged late yesterday after the Bloomberg report.Both stocks gained earlier inHong Kong todaybefore closing lower. China Unicom's listed unit fell 2.4 percentto HKD9.35 (USD1.19) a share, while China Telecom lost 1 percent to HKD3.85.

China began research, development and testing of 5G in early 2016 and set this year as a crucial period to establish its standard and develop commercial products.The country is ahead in the global development of 5G networks, which are expected to be at least 10 times faster than 4G, and aims to roll out commercial services as early as next year, Yicai Global reported in March.

Editor: Ben Armour