China's No. 2 mobile phone company, China Unicom Ltd., said it will buy nine remaining provincial networks from its parent for HK$3.02 billion (US$387.18m), using its own cash to fund the acquisition.

Unicom said in a statement that the nine networks it will buy from parent China United Telecommunications Corp., carry net debt of HK$7.6b. The combined purchase price, including cash and debt, totals HK$10.6b (US$1.36b).

In a complex set of related transactions, China Unicom Ltd. said its subsidiary, CUCL, had agreed to sell its Guoxin nationwide paging business to China Unicom's "A Share" publicly traded company, for HK$2.59 billion (US$332.05m).

The provincial networks deal would give Unicom a network spanning 30 provinces in the world's biggest telecommunications market based on the GSM wireless phone standard popular in Europe. The additional provinces are mostly located in western and northern China, less wealthy areas than its eastern coastal base.

The company's chief rival, China Mobile (Hong Kong) Ltd., the world's largest carrier based on subscribers, also operates a separate network based on the same standard.

Analysts had estimated Unicom would pay 11-13 billion yuan (US$1.33b US$1.57b) for the GSM networks, which would include a discount to their actual value.

The total purchase price of the nine provincial networks represents a multiple of about 12.8 times the forecasted net profit of HK$234 million for the year ending in December.

The proceeds of the paging company sale will go to the general working capital of the Unicom Group and Guoxin will become a wholly owned unit of the A Share company, Unicom said.

Unicom previously said it was in talks to buy the nine networks from its parent in the latest of a series of deals by Chinese carriers to expand by buying assets from their parent companies.

Such purchases have been typical of former state-owned Chinese firms that have made public offerings with their best assets first, then slowly injected additional assets into the listed company over time.

Last week China's State Asset Regulatory Commission said it expected Unicom to complete the nine-province acquisition by year-end.

Unicom also operates a newer network based on the CDMA standard backed by U.S.-based Qualcomm Corp..

U.S.-listed shares of China Unicom traded 14 cents lower to $8.75 in New York Stock Exchange trading.

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