The latest media reports suggest that Spanish Phone Company Telefonica SA and China Unicom Ltd., one of China's three main state-owned carriers, are mulling to buy 1 billion worth of each other's shares, along with expanding a strategic alliance.

The companies, which plan to exchange managers, specified that they will cooperate in the development of technology for mobile phones, providing services to multinational customers and other areas under the agreement signed Sunday.

Telefonica chairman Cesar Alierta said in a statement: "We are fully committed to the alliance and will exploit the synergies offered by this far-reaching cooperation to benefit our shareholders and customers alike."

The companies also plan to purchase $1 billion worth of each other's shares based on the average closing price over the 30 trading days ended Aug. 28.

While Telefonica's stake in Unicom would increase to 8 percent, Unicom will become a Telefonica shareholder for the first time with a stake of approximately 0.88 percent. Nearly 5.5 percent of China Netcom Ltd was owed by the Spanish company, while the former was merged into Unicom as part of reorganization last year.

Unicom chairman Chang Xiaobing said in the statement: "We are looking forward to enhancing the partnership and achieving a win-win situation for both parties."