China Tower Avoids Redundant Infrastructure Build-outs Among China Big Three
Aug 02, 2018 - China Volda
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China Tower Corporation was formed by the three largest carriers in China, China Mobile Ltd., China Unicom (Hong Kong) Ltd and China Telecom Corporation transferring their assets to the joint venture. The new intergration will enhance network coverage and save on capital expenditure for constructing telecom towers.
The creation of a tower firm avoids the need for redundant infrastructure build-outs among the 3 state-owned operators, allowing them to share space on towers. The combined tower assets of all 3 operators are valued at around CNY230 billion ($36 billion).
China Tower will in turn provide the operators with shares and cash by way of compensation, with shares valued at CNY1 each. Market leader China Mobile will take a 38% stake with a maximum of around 5.1 billion shares. China Unicom will receive a holding of 28.1% along with 37.74 billion shares, while China Telecom will have an interest of 27.9% and 37.47 billion shares.
Founded in July 2014, China Tower took control of almost 1 million towers from the Chinese Big Three in 2015. The plan was for the firm to build out over a further 1 million towers across the next 2 years so that the leading operators do not need to construct overlapping infrastructure.
The joint venture’s towers will feature shared base station antennas and power equipment, but operators will be able to install their own antennas and board cards. The creation of the tower company was expected to provide a boon to China Telecom and China Unicom by allowing them to expand their 4G coverage rapidly.
The smaller operators will be keen to regain ground against China Mobile, which boasts 82% of the country’s 4G connections and a 67% overall share of the market. The market leader has deployed over 1 million TD-LTE base stations in an 18-month period.