China Telecom, the mainland's largest fixed line telephone operator, will pay a higher than forecast 9-10 billion US dollars to buy six provincial networks from its parent, a report said.

Industry analysts had earlier forecast that the Hong Kong-listed firm would pay its parent 7-9 billion US dollars in the form of cash and assumed debt.

The South China Morning Post cited unnamed banking sources as saying the firm would probably assume less parent company debt and pay a higher cash contribution compared to a similar transaction conducted by China Unicom last year.

Chairman Zhou Deqiang said on Wednesday the company expected to complete its acquisition of six provincial fixed line networks on the mainland from parent China Telecommunications Corp. by year-end.

The company intended to finance the acquisition of the six networks in the provinces of Anhui, Fujian, Jiangxi and Sichuan, the autonomous region of Guangxi Zhuang, and Chongqing city, through internally-generated funds, he said.

"There is no intention to use equity financing (for the acquisition) at the moment," Zhou added.

The price paid for the networks will be important in swaying investor sentiment as little is currently known about the financial positions of the six networks, the newspaper said.

A Morgan Stanley research report said the six provincial networks together had a debt to equity ratio of about 65 percent compared to 3.6 percent for China Telecom.

Acccording to China's Ministry of Information, the six provinces have a total of 45.91 million fixed-line users and 8.74 million internet users, which would boost China Telecom's user base by about 74 percent.

China Telecom reported Wednesday that first half net profit rose 9.20 percent from a year earlier to 9.26 billion yuan (1.13 billion dollars) on steady growth in its core business, supported by a fast expansion of its broadband and value-added services.

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