LG Electronics Inc. is still mulling the fate of its money-losing mobile business, industry insiders said Monday, amid rumors that the South Korean tech giant may shut down the unit instead of selling it.

In January, LG announced its mobile communications division is open to "all possibilities" for its future operations after years of poor performance.

LG's mobile business has been in the red since the second quarter of 2015. Its accumulated operating losses reached nearly 5 trillion won ($4.4 billion) last year.

Analysts have predicted that LG will either shut down or sell its mobile business, or at least scale it back.

"LG reportedly had talks with others over the sale of the unit but apparently there was not much progress in their negotiations," an official in the mobile industry said on condition of anonymity. "It seems that selling its entire mobile business appears to be difficult at this moment, as is the partial sale of the unit."

LG, once the world's third-largest handset maker, reportedly was in negotations with Vingroup of Vietnam and Volkswagen of Germany but could not make notable progress, according to industry observers.

With LG's mobile business restructuring plan apparently running in place for two months, industry trackers are now speculating that the company is leaning more toward the option of closing the mobile unit.

With its next smartphone development projects, such as "Rainbow" and "Rollable," reportedly ceased at this point, they predicted that LG may be looking for ways to utilize its existing mobile business workforce. LG previously said those in the mobile unit will keep their jobs.

Industry observers said workers at the mobile business are likely to be shifted to other units in the company, such as the vehicle component solutions division, where LG is trying to beef up its size for future growth.

The company previously said it is looking for ways to "internalize" and use its core mobile technology to create synergy with its other businesses.

LG, best known for its home appliance products, is expected to reveal its decision for the mobile business unit next month after a board meeting, according to officials.

According to market researcher Counterpoint Research, LG was the world's ninth-largest smartphone vendor with a market share of 2 percent after shipping 24.7 million smartphones last year, down 13 percent from a year earlier. (Yonhap)