Chinese telcos forge network sharing deal

China’s main telecoms companies have agreed to establish an infrastructure sharing venture to reduce the cost and optimise the construction, maintenance and operation of infrastructure.

China Mobile, China Unicom and China Telecom have formed China Communications Facilities Services Corporation to reduce duplicating and redundant construction of telecommunications towers and related telecommunications infrastructure as well as to optimise investment efficiency, further promote resource sharing and reduce impact on the environment.

The company will also allow the carriers to reduce their overall investment scale; utilise existing assets with higher efficiency, save capital expenditure, optimise cash management and focus on core operations.

The companies said that they are still in the preliminary stages of discussion but will look at injecting existing infrastructure assets into the new entity.

Network sharing is already widely used in mature markets and is becoming increasingly popular in emerging markets as well, particularly those with large geographic areas and low population density like Africa. Several operators can share infrastructure rather than each paying to expand into a low ARPU region.

Under the partnership, China Mobile will hold 40 per cent of the company, China Unicom will hold 30.1 per cent and China Telecom will hold 29.9 per cent of the company.

The 9th annual LTE Asia conference is taking place on the 23rd-25th September 2014 at the Marina Bay Sands, Singapore. Click here to download a brochure for the event.

In related news, China Mobile is understood to be slashing investment in its wifi hotspot network because the pay to use hotspots fail to generate any income, with each node reportedly generating just over $2 per month.

China Mobile will now cut future investment on the wifi network and will instead divert the spend to TD-LTE deployment.

One comment

  1. Avatar Michael Elling (@Infostack) 17/07/2014 @ 11:14 am

    This is exactly the approach I proposed to Sprint in 1997-98 when I brought them the MMDS spectrum which is today Clearwire. I reasoned that they lacked the market penetration to scale the investment (only $2-3bn in frequency back then, but $10-20bn in capex) and that their real competition wasn’t AT&T or MCI, rather the last mile access monopolies (aka the Baby Bells). Oh well.

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