A potential deal would only happen after the debt-laden company, which filed for Latin America’s largest bankruptcy proceeding 17 months ago, resolves its disputes with creditors, the source added.
The person asked for anonymity because is not authorized to discuss the negotiations publicly.
The future of the company hinges on a creditors assembly on Nov. 10, which will decide on a restructuring plan for 65 billion reais ($20 billion) in debts.
Oi did not immediately comment and China Telecom did not immediately respond to a request for comment outside normal business hours.
($1 = 3.2985 reais)