China Telecom (0728.HKG), the nation’s smallest telecom service provider, is looking to acquire 3G assets from its parent company for US$19 billion, a price exceeding the firm’s book value, Reuters reported, citing sources familiar with the situation. The acquisition is expected to slash long-term expenses for the subsidiary, which is currently leasing its 3G bandwidth and infrastructure from its state-owned parent China Telecom. The leasing fee amounted to approximately US$3 billion last year and is forecasted to increase with rising numbers of Chinese mobile subscribers. According to sources, the carrier will use its own financial resources to fund the purchase, and is not planning to issue new shares. China Telecom’s spokesman disclosed that the company is looking to complete the acquisition by the end of this year.
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