China’s three mobile operators have signed a transfer agreement to create a tower joint venture, after agreeing to sell a 6% stake in it to state-run investment firm China Reform Holdings Corp (CRHC).
China’s three mobile operators have signed a transfer agreement to create a tower joint venture, after agreeing to sell a 6% stake in it to state-run investment firm China Reform Holdings Corp (CRHC).
CRHC, a platform for managing and optimising state-owned assets, is paying in cash for its share of a JV that will hold assets valued at about Yn214bn (US$33.7bn).
Leading mobile player China Mobile (HKG:0941) will receive cash and a 38% stake in the China Tower venture, in return for selling towers and related assets with an appraisal value of Yn116.4bn (US$18.3m).
China Unicom (SHA:600050) will get cash and a 28.1% stake for selling Yn63.2bn (US$10bn) worth of assets. China Telecom (HKG:0728) is selling Yn34.3bn (US$5.4bn) worth and will inject cash into China Tower for its 27.9%.
China Mobile is advised by China Securities Co, China Unicom by Morgan Stanley and China Telecom by UBS.
Plans for the JV were first announced last year to enhance network coverage through sharing tower resources, make capital expenditure savings, and optimise cash management.
The original plan would have seen China Mobile hold 40% of China Tower, China Unicom 30.1% and China Telecom the remaining 29.9%.
CRHC’s participation comes in light of a broader government initiative to increase the efficiency of state groups, while broadening China Tower’s shareholder structure to improve corporate governance.
The mobile operators said they were still finalising how they would lease sites from the JV and how to deal with service charges.
