$1.6B Chinese tower deal at odds with recent industry moves

China operators announce $1.6B towers firm

14 JUL 2014

China’s three leading operators are to jointly set up a new firm to construct, maintain and operate their cellular infrastructure, as they face the massive rollout of 4G across the country.

In a filing, the three companies agreed to set up a new firm called China Communications Facilities Services Corporation with a share capital of CNY10 billion ($1.6 billion).

China Mobile will hold 40 per cent of the venture while rivals China Unicom and China Telecom will each have 30 per cent stakes.

However, elsewhere some operators have moved to sell their cellular infrastructure, often to improve their balance sheets.

Bharti Airtel last week sold the first chunk of its African towers unit. And Telecom Italia plans to offload its Brazilian infrastructure. Both moves are financially motivated.

China Mobile said the joint venture will reduce duplication and unnecessary construction of cellular towers, so improving investment efficiency. The country’s largest operator said the move would also enable it to better utilise existing assets.

The Chinese operators announced their intention to set up the venture at the end of April.

Discussions are at a preliminary stage in terms of which assets will be included in the deal, which will handle construction, maintenance and operation of infrastructure.

The three operators do not explicitly mention 4G but all three face a massive project to rollout LTE services across the country.

Author

Richard Handford

Richard is the editor of Mobile World Live’s money channel and a contributor to the daily news service. He is an experienced technology and business journalist who previously worked as a freelancer for many publications over the last decade including...

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