Chinese state-run telecommunications operators China Telecom and China Unicom inked an agreement to cooperatively build a 5G mobile network, with the main aim of reducing costs, international press reported.
Under the “co-build, co-share” deal, the carriers will work together to outline districts in 15 cities for the network construction, with their respective total scale of 4G base stations in mind.
In Beijing, Tianjin, Zhengzhou, Qingdao and Shijiazhuang, the ratio of construction districts handled by China Unicom to China Telecom will be 6:4, while that ratio will be reversed in the 10 southern cities, including Shanghai, the companies said.
The company handling a designated region will also bear the associated investment, maintenance and operating costs, they added.
China Unicom also said that it believes the cooperation agreement will “help improve network investment return and asset operation efficiency, leading to win-win for both parties.”
China Telecom’s Chairman Ke Ruiwen has previously said that the resources of China Telecom and China Unicom are highly complementary, making it easier to cooperate in the 5G space.
The two telcos had also said they were open to include China’s largest telco China Mobile in the initiative to deploy shared 5G infrastructure in low population density areas.
China Telecom said earlier this year it planned to invest CNY 9 billion ($1.26 billion) and build 40,000 5G base stations by the end of the year, in line with China Unicom’s plans. China Mobile said it would deploy 50,000 bases stations and invest CNY 24 billion this year.
China Tower Corp, the telecom tower company jointly owned and shared by the three mobile operators, said earlier this month that it had received client demands to install 65,000 5G base stations so far, a number that it expects to rise to 100,000 by the end of 2019.
In June, China’s Ministry of Industry and Information Technology (MIIT) officially issued licenses for the launch of commercial 5G networks in the country. Those 5G permits were granted to state-run carriers China Mobile, China Unicom, China Telecom and state-owned broadcaster China Broadcasting Network.
At the end of last year, the MIIT issued licenses for 5G trials in a number of cities across China. Commercial rollout of 5G in China was initially expected to occur during 2020. However, the decision by the government to accelerate 5G deployment will trigger investment in the Chinese market.
Shared network infrastructure agreements of this kind could reduce China’s overall infrastructure spending, potentially affecting telecoms gear makers such as Huawei and ZTE.
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