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.
