China Mobile, China Unicom and China Telecom, the country’s three mobile operators, have agreed to jointly establish a tower company under the name China Communications Facilities Services.
The joint venture will have a registered capital of Yn10bn…
China Mobile, China Unicom and China Telecom, the country’s three mobile operators, have agreed to jointly establish a tower company under the name China Communications Facilities Services.
The joint venture will have a registered capital of Yn10bn (US$1.6bn) with leading telco China Mobile holding the lion’s share with a 40% stake.
Unicom will own 30.1% and Telecom the remaining 29.9%, the companies said in separate announcements.
The business scope of the new entity will include construction, maintenance and operation of telecoms towers to reduce redundant infrastructure and increase industry-wide investment return.
“The establishment of China Communications Facilities Services will also allow the company to reduce its overall investment scale; utilise existing assets with greater efficiency; save capital expenditure; optimise cash management; focus on its core operations; improve the company’s competitiveness; and expedite the company’s transformation and upgrade,” each operator said.
The joint venture-partners are also considering injecting certain telecoms assets into the JV.
The plan to create a joint towerco was first revealed in May. Unlike other Asian countries such as India and Indonesia, China does not have an independent tower company.
According to Nomura analyst Leping Huang this is because of “complicated interest adjustments among the three operators (such as different preferences on network rollout plan and tower site)”.
Huang commented the JV could help accelerate China Unicom’s and China Telecom’s 4G network rollout and be positive for telecoms vendors “as it could push the operators to allocate a higher proportion of capex to telecom equipment”.
China Mobile is the world’s largest operator in terms of subscribers with over 775 million customers. China Unicom and China Telecom respectively have 285 million and 185 million subscribers.
