China's cellcos may form tower JV

Dylan Bushell-Embling
02 May 2014
Daily News

China's three main operators are evaluating setting up a joint infrastructure company that would operate and manage their tower assets.

China Mobile, China Telecom and sector regulator MIIT have all confirmed that talks are underway regarding the joint establishment of a tower company, with the goal of promoting network sharing and lowering overall network capex and opex.

Negotiations are at a preliminary stage and no terms have yet been agreed upon, China Telecom said in a statement.

The MIIT said the potential reduced network construction costs would ultimately benefit the majority of China's telecom users.

South China Morning Post estimates that the arrangement could lead to combined annual savings of 50 billion yuan ($7.99 billion) for the three operators.

The total valuation of the tower assets could be as much as $46.5 billion, and the JV could eventually be in for a public listing.

Rethink Wireless commented that the MIIT's comments suggest that the operators are under government pressure to pursue the joint venture.

The government is already trialing a series of telecom sector reforms, including introducing the MVNO model, allowing limited foreign investment in the sector and introducing a value-added tax on telecom services.

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