China Telecom said on Tuesday that because of the growth of users are more than tripled in the past year, so the company now intends to buy CDMA networks which leased from the parent company.
Wang xiaochu, chairman of China telecom today at a press conference in Hong Kong said that the company will complete the 3G CDMA mobile network acquisition before the end of this year. He says that the network is worth about 90 billion yuan ($1.4 billion), China telecom will contract a loan to implement this acquisition.
With the handset subsidies, China Telecom's 3G users in the past year increased from 4.1 million to 12.3 million. The acquisition of CDMA networks will improve the company's profits. China Telecom said today that the rental fee of CDMA network capacity had been paid as much as 13.3 billion yuan last year.
Yuanta Securities Shanghai analyst Kelvin Ho said: "Why China Telecom to buy this part of network is that the rental fee they paid is higher than the depreciation of assets and other related costs. If China Telecom buy the networks, they will save the cost. And the parent company also will introduce attractive price to add the value of the networks." (by Nye Sha)
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