Out-Law / Your Daily Need-To-Know

Telecom providers form China’s first joint network infrastructure firm

Out-Law News | 21 Jul 2014 | 10:20 am | 1 min. read

Three Chinese telecom providers are to form the country’s first joint network infrastructure company to focus on the construction, maintenance and operation of telecommunications towers, base stations and related transmission assets.

Total registered capital of the new company, China Communications Facilities Services Corporation Limited (3-page / 64 KB PDF), will be 10 billion renminbi ($1.63bn). The joint venture’s partners are China Mobile, which will have a 40% stake, China Unicom (30.1%) and China Telecom (29.9%).

China Mobile, the country’s largest operator, said the partners “are at a preliminary stage in considering potential injections of certain telecommunications assets” into the new company, subject to legal and regulatory requirements.

China Mobile said any further announcement would be made “as and when appropriate”.

In its annual report for 2013 (4-page / 928 KB PDF), published last March, China Mobile said it had “modestly increased its investment in infrastructure resources in order to provide better support for the explosive growth in data traffic”. The company said then that it was “determined to spare no effort to build a superior 4G network, aiming to become the world’s largest 4G network with 500,000 base stations that will essentially deliver continuous coverage in all cities, urban areas of counties and key villages by the end of 2014”.

China Mobile was granted a 4G TD-LTE (Time Division-Long Term Evolution) licence in December 2013. Last month, China’s state-run news agency Xinhua said the ministry of industry and information technology had given approval for China Unicom and China Telecom to conduct 4G hybrid network tests in 16 cities.

According to Xinhua, China Mobile was "the main beneficiary of the TD-LTE licence issuances as it dominated TD-LTE research and development in recent years”. By the end of May 2014, China Mobile's 4G users totalled 8.11 million, Xinhua said.

In its latest statistical report on internet development in the country, released last January, the China Internet Network Information Center said that as of December 2013 China had 500 million mobile internet users. Mobile phones are “still the main driving force for the growth of internet users in China”, the report said.