Vodafone Group Plc, the world's biggest mobile phone firm by revenue, does not intend to sell its stake in Hong Kong-listed China Mobile Ltd, company executives said.

Rumors were circulating that Vodafone may sell its China Mobile shares to finance a buyout of Hutchison Essar Ltd, India's fourth-largest mobile phone operator.

But Vodafone Chairman John Bond said the firm had "never sold a single China Mobile share", suggesting it would continue holding its 3.27-percent stake in the Chinese operator.

Vodafone in 2000 and 2002 invested in China Mobile Ltd separately with a total of $3.25 billion, holding a 3.27-percent stake and a board seat.

Last week Vodafone reached an agreement with India's Essar Group on an $11.1-billion purchase of a 67-percent stake in Hutchison Essar Ltd.

Prior to that, rumors had been rife that Vodafone was considering selling its China Mobile shares to raise funds for the buyout. Speculation hit the Hang Seng Index last month.

China Mobile shares have more than doubled in the past year, increasing its market capitalization to nearly $200 billion and making it the most valuable cellular carrier in the world.

If Vodafone sells the 3.27-percent stake, it could profit more than HK$20 billion, based on the current share price.

According to media reports, Vodafone owned over 2 percent of China Mobile as of last September.

But Howard Xia, general manager of Vodafone China Ltd, said Vodafone had not reduced its stake.

Xia oversees the $3.25-billion investment in China Mobile and a $35-million investment in ASPire Group, a joint venture formed by China Mobile, Vodafone, Merrill Lynch and Hewlett Packard.

Vodafone holds a 9.99-percent stake and two board seats in ASPire, a wireless data service provider that oversees the billing system of China Mobile's wireless data service brand Monternet.

Bond last week met China Mobile Chairman Wang Jianzhou in the hope of enhancing cooperation.

Wang Guoping, an analyst at China Galaxy Securities, said it was unlikely Vodafone would reduce its stake in China Mobile.

"Vodafone's entry to India underscores its increasing interest in emerging markets such as India and China. A sell-off of China Mobile shares would be contrary (to that)," he said.

Now the top priorities for Vodafone are cutting costs in Europe while recording robust growth in emerging markets.

"And even if it reduces the stake by a small amount, it will do little to finance the acquisition (of Hutchison Essar Ltd)," Wang said.

The analyst said China Mobile's shares might not have reached their peak given its sustained dominance in China.

"It still has some room for growth," Wang said, adding that imminent 3G licensing and an industry restructure would not have a big impact on China Mobile's share price.

There is increasing likelihood that China Mobile may be mandated to run 3G (third-generation) cellular networks based on TD-SCDMA, China's home-grown standard for 3G mobile telephony.

TD-SCDMA is less mature compared to its rival foreign standards, which could pose a risk for China Mobile. But "initially, it's the State-owned parent of China Mobile Ltd that would be asked to adopt TD-SCDMA. So it will not have much impact on the Hong Kong-listed arm," said Wang.

"And even if an industry reshuffle plan is finalized, the most likely scenario is that the three weaker operators (China Telecom, China Unicom and China Netcom) would be consolidated while China Mobile would remain unchanged. China Mobile's dominance will not be eroded too much."