The entry of China Tower into the mainland market in 2015 doubled the country’s tower-sharing rate, in turn significantly lowering tower-leasing costs as well as helping operators reduce capex.
Tower-sharing rates jumped from 20 per cent before China Tower’s entry to 40 per cent at the end of 2016. China Tower chairman Liu Aili said the co-use rate for new towers hit 70 per cent and in some regions the rate is as high as 90 per cent, C114.net reported.
Higher co-use rates drive down tower usage fees. Leasing fees can drop by between 20 per cent and 40 per cent when a tower is used by two operators and 30 per cent to 50 per cent when shared by all three.
Fitch Ratings forecasts operators’ capex will drop by about 10 per cent this year. The ratings agency in October reported declining tower rental fees and lower capex would help boost China Mobile and China Telecom’s ARPU.
Liu said China Tower deployed 1.026 million tower base stations in 22 months.
With China Tower’s support, China Unicom rolled out about 700,000 4G base stations in 20 months, one-third of the FDD base stations worldwide, C114.net said.
The country’s three mobile operators handed over much of their tower assets to China Tower in 2015.
State-run China Tower lost CNY1.3 billion ($195 million) in Q2 on revenue of CNY13.2 billion, but planned to be profitable by the end of 2016 or early 2017. It is targeting a listing in 2018, but analysts say it must raise its operational efficiency.