Analysts estimate China Telecom's plan to acquire seven cellular networks from its parent may cost between US$30 billion and US$40 billion. The mainland's dominant mobile phone company may need to raise as much as US$10 billion to finance the acquisition, while the balance probably could be satisfied by issuing shares to its parent, the analysts said. China Telecom's parent, which holds 75.03 per cent stake, would not drop to less than a 75 per cent holding in its SAR-listing vehicle, sources said. Credit Suisse First Boston regional telecoms research head NiQ Lai expects about 25 per cent of the acquisition cost would be raised through a combination of equity and debt to be issued to independent investors. Sources said China Telecom was also considering raising a portion of the funding from yuan debt equity and US dollar convertible bonds. China Telecom yesterday said it was talking to parent China Mobile Communications about buying seven of the mainland's biggest provincial and municipal mobile-phone networks. They include most of richest provinces and municipalities of the parent's remaining 25 networks. Analysts said they were surprised by the high quality of the networks to be injected in the SAR-listing vehicle in one lot. Analysts generally welcomed the 'better than expected' injection plan, saying the new acquisition would help to boost China Telecom's earnings and subscribers base. The seven networks, which include Beijing, Tianjin, Shanghai, Liaoning, Hebei, Shangdong and Guangxi, had about 15 million subscribers as at the end of last month. China Telecom's subscriber base would nearly double from 20.2 million to 35.2 million. BNP Equities analyst Marvin Lo Ming-hung said he has upgraded the fair value of China Telecom from HK$44.80 to HK$66.30 due to the pending acquisition plan. 'China Telecom is normally trading at about 36 per cent above its fair value. We think China Telecom's target price should be HK$88,' Mr Lo said. Shares in China Telecom lifted HK$2.50 to close at HK$66.50.