China Tower asset acquisition equates to $24B gain for three China telcos
Regulators in China are working toward an Aug. 15 goal of transferring some 1 million cell towers to a state-backed joint venture comprising the nation’s three largest carriers: China Mobile, China Telecom and China Unicom, which last year formed China Tower to take ownership of tower assets and assume responsibility for maintenance and operations.
Analysts at Barclays told the South China Morning Post that the cell tower asset transfer is waiting for “some corporate action involving the tower company.”
“We are taking the view that all ground-based towers of all three operators are to be injected into the tower company at one go,” said Anand Ramachandran, head of Barclay’s telecommunications, Internet and media equity research in Asia.
Reports indicate that the transfer of tower assets to the joint venture will allow the telecom operators to record a one-time gain of about $24 billion.
Analysts counted a combined 999,000 cell towers among the three companies with China Mobile leading the way with 540,000. China Mobile holds a 40% stake in the telecom infrastructure company, while China Unicom and China Teleom split the remaining 60% stake. There are already around 3.3 million base stations in China.
Based on company documents, China Tower will focus solely on “construction, maintenance and operation of telecommunications towers; also on construction, maintenance and operation of ancillary facilities including base station control rooms, power supplies and air conditioning as well as interior distribution systems; and provision of outsourced services of base station equipment maintenance.”
The coming physical improvements to the network are meant to accommodate the expansion of 4G service. Meanwhile, China Mobile has already begun research and development into “5G” service.
