Mobile operator China Telecom is looking to acquire the 3G spectrum controlled by its parent company by the end of the year, a spokesperson told TelecomFinance.
No value has been disclosed but two sources quoted by Reuters said that China Telecom would…
Mobile operator China Telecom is looking to acquire the 3G spectrum controlled by its parent company by the end of the year, a spokesperson told TelecomFinance.
No value has been disclosed but two sources quoted by Reuters said that China Telecom would pay more than the book value of the assets, which stands at approximately Yn120bn (US$18.8bn).
With this acquisition, the carrier, which is reportedly leasing the bandwidth and infrastructure from its parent for Yn19bn a year, is looking to cut long-term costs as the number of 3G subscribers is increasing.
The spokesperson did not comment on the reasons for this deal but said a proposal would be submitted to shareholders for approval in due course. “Currently, the company is still in the process of negotiating with the parent company on the terms of the acquisition and no agreement has been reached,” the spokesperson added.
China Telecom will reportedly use existing cash and debt financing to fund the acquisition.
With approximately 135 million subscribers as of March 2012, China Telecom is the smallest of the country’s three operators. It competes with China Mobile and China Unicom.
