China Tower

2015: The Chinese mobile operators transferred all towers to the general joint venture

In the middle of October, 2015 it became known that the mobile operators, largest in China, sold the tower infrastructure to the joint venture (JV) created by them under the name China Tower. Thanks to this step the cellular companies intend to cut down expenses in the conditions of the growing popularity of messengers, such as WeChat.

China Mobile, China Unicom and China Telecom transferred China Tower the towers of cellular communication (with the subsequent their lease) which total cost taking into account an award which will be considered as an additional profit of three operators in 2015 is 234.1 billion yuans (about $36 billion).

The largest Chinese operators sold cellular towers worth $36 billion to the joint venture

38% of this joint venture belong to China Mobile, on 28% received China Unicom and China Telecom, and the remained 6% were purchased by the Chinese corporation China Reform created in 2010 by the government of the People's Republic of China for management of the largest state companies.

Other owners of China Tower will divide China Reform investments among themselves and will spend, in particular, according to sources of Bloomberg, for development of network of stations for recharge of electric vehicles. The Chinese authorities aim to popularize this type of transport, and universal presence in the territory of the country of the China Tower enterprises facilitates the solution of this task, notes news agency.

According to experts, department of tower infrastructure in one new firm suits not only to the operators participating in this transaction, but also all Chinese telecom industry.

"Long-awaited completion of transfer of tower assets should help small operators to vyrovnit the competition — the analyst of Jefferies Group Cynthia Meng says. — However in view of the scale of business of China Mobile, most likely, will save leadership in the telecommunication market".

The managing director of the London Blackfriars Asset Management Tony Hann called consolidation of infrastructure by the Chinese operators "a logical and reasonable step". The companies do not have sense to duplicate infrastructure especially as all of them anyway partially belong to the state. Having the tower company, they should share the assets, Hann considers.^[1]

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