MIIT Issues Telecom Infrastructure Sharing Notice

MIIT, 10/06/08

In order to decrease superfluous telecom construction, the Ministry of Industry and Information Technology (MIIT) and the State-owned Assets Supervision and Administration Commission (SASAC) have resolved to promote joint construction and joint use of telecom infrastructure, and have issued a notice requiring all telecom infrastructure enterprises – the post-restructuring China Telecom (NYSE: CHA; 0728.HK), China Mobile (NYSE: CHL; 0941.HK), and China Unicom (NYSE: CHU; 0762.HK; 600050.SH) – to implement sharing and joint construction for all towers and pole lines, as well as sharing and joint construction for base station equipment and transmission lines meeting the requirements. In addition, exclusive lease agreements for third-party facilities will be forbidden, with a corresponding system for reviewing and punishing agreements that violate the new rules. The measures laid out in the notice took effect as of October 1.

A national workgroup for the joint construction and sharing of telecom infrastructure facilities, headed by the MIIT and SASAC, and with participation from the telecom industry, will also be established to oversee and mediate in the joint construction and use of national telecom infrastructure, and to make decisions on major projects.

Editor's Note: The new measures are expected to help China Telecom and China Unicom better compete against industry giant China Mobile. The two smaller operators, by sharing China Mobile's existing base stations, will be able to expand into new regions more quickly and cost-effectively.

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