China Telecom, the country’s third-largest mobile operator, is planning to acquire the 3G assets held by its state-owned parent in a deal that could be worth CNY120 billion (US$19 billion).

According to sources at Reuters, a deal for the Hong Kong-listed operator to buy the assets from state-affiliated China Telecom Corp could happen by year-end, with the operator expected to confirm the plan later this month. The price tag touted surpasses the two firms’ combined book value.

The operator will rely on its own resources and debt financing to fund the purchase and doesn't plan to issue new shares, the sources add. 

China Telecom currently leases 3G bandwidth and infrastructure from its parents, but is seeking to acquire the assets to cut long-term costs, the report says. 

The Chinese number-three reportedly paid out CNY19 billion in leasing fees last year, a cost that is rising quickly as the operator continues to add 3G customers.

China Telecom surpassed 50 million 3G (CDMA 1xEV-DO) subscribers at the end of Q2, accounting for almost a third of its total.