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China Telecom Completes Purchase of Unicom CDMA Network

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China Telecom says that it has completed the $6.4 billion purchase of China Unicom's CDMA network. China Unicom is now free to complete its own purchase of landline operator, China Netcom as part of the government mandated restructuring of the industry.

China Telecom needs to pay 70 percent of the purchase price within three days of the deal's completion, and the remainder by March 31, 2009. The company is funding the acquisition through USD7 billion of new debt.

China Telecom has also issued tenders for a network expansion to increase coverage areas rather than boost the quality of service in areas already under CDMA coverage. The tenders are reported to be worth as much as USD4 billion.

According to recent media reports, the company is expecting a massive jump in subscriber growth and is planning to order some 55 million CDMA phones next year.

Figures from the Mobile World database show that China Unicom ended Q1 '08 with just under 43 million CDMA subscribers - and a recent study from the Ministry of Industry and Information Technology expects that figure to reach at least 64 million by 2012. China Telecom had originally anticipated a subscriber base of no more than 100 million by 2012.

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