By Denny Thomas and Kate Holton

HONG KONG/LONDON, Sept 7 (Reuters) - Vodafone, the world'slargest telecom operator by revenue, launched the sale of its3.2 percent stake in China Mobile on Tuesday, sources withdirect knowledge of the process told Reuters.

The entire stake is worth $6.7 billion, based on ChinaMobile's last traded price, though it was unclear how much ofthe stake was on sale as of Tuesday.

Two people familiar with the matter said Vodafone could endup placing the whole of its stake.

The planned sale is part of Vodafone's strategy to exitnon-strategic investments which analysts and investors believehave hit the firm's overall value in recent years.

Vodafone declined to comment. China Mobile could not bereached.

People familiar with the matter said eight banks includingGoldman Sachs, UBS, Bank of America Merrill Lynch, JP Morgan,Morgan Stanley and HSBC were pitching to arrange the placing,managed by corporate adviser Rothschild.

The planned exit comes after Vodafone's lock-up period onthe China Mobile stake ended recently.

Vodafone has seen the value of its stake more than doublesince it purchased it in two tranches between 2000 and 2002 fora total of $3.25 billion.

China Mobile shares are up 12.5 percent in 2010 comparedwith a 2.2 percent fall in the broader Hong Kong Index.

And analysts had said it would be one of the easier minoritystakes for Vodafone to sell, compared with other possibledisposals such as its 44 percent stake in France's SFR and its45 percent holding in Verizon Wireless, which only have onepossible buyer each.

Despite China's position as the world's biggest mobilemarket, with nearly 800 million subscribers, growth for ChinaMobile and its competitors has also been slowing as revenue fromvoice calls declines amid increasing cellphone penetrationrates.

Vodafone said in July it was reconsidering its strategy onholding minority stakes in companies, prompting speculation itwould look to sell or spin off its stakes in operators incountries including France, the United States, Poland and China.

Senior bankers said Vodafone was not under pressure to sellassets to shore up its balance sheet or improve cashflow.

Its shares were flat at 159.7 pence at 1539 GMT after beingdown in earlier trading.

All of the banks either declined to comment or were notimmediately available for comment. (Additional reporting by Michael Flaherty, Victoria Howley andQuentin Webb; Editing by Will Waterman and David Cowell)