China Telecom Corporation Limited said on Wednesday it entered into an agreement with its parent company, China Telecommunications Corporation (or China Telecom Group), to purchase certain CDMA network assets owned by the parent which it currently leases, for CNY84.595 billion (USD13.346 billion).

In a statement, the company said the final consideration could be 87 billion yuan, which did not include 30 billion yuan in liabilities. That suggested the final value of the deal would be more than 117 billion yuan.

Under the current agreement, China Telecom pays 28 percent of its audited CDMA service revenue to use the network, a sum that is increasing as it adds 3G subscribers.

For the six months, China Telecom reported a profit attributable to shareholders of CNY8.8 billion, down from CNY9.6 billion, on operating revenue of CNY138 billion, up 14.8 percent from CNY120.2 billion.

It noted that it “believes the launch of the iPhone to expand the high-end market would require an appropriate increase in marketing initiatives which would create short-term pressure on profitability, however, it would enhance long-term sustainable growth and value creation for the company”.