China Unicom, China Telecom to Co-Build Shared Nationwide 5G Access Network
China Unicom, 9/09/19
China Unicom (NYSE: CHU; 0762.HK; 600050.SH) and China Telecom (NYSE: CHA; 0728.HK), each of which holds a roughly 20% share of China's approximately 1.6 bln mobile subscriber base, today jointly announced that the two network operators will co-build and co-share a single, nationwide 5G access network.
Under the framework agreement entered into by China United Network Communications Corporation Limited ("China Unicom"), a wholly-owned subsidiary of China Unicom (Hong Kong) Limited, and China Telecom Corporation Limited ("China Telecom"), the two parties will delineate and designate the regions for construction of the 5G network by each party. The party responsible for the construction in a designated region will bear the relevant investment, maintenance and operating cost of the network. The 5G network co-build, co-share will be based on co-share of access network and 5G spectrum resources, but with core networks to be constructed independently by each party.
Both parties will jointly ensure a unified standard on network planning, construction, maintenance and service in the 5G network co-build, co-share regions, and assure the same service level. Any cooperation on network co-build, co-share by either party with a third party must not improperly harm the interests of the other party.
The subscriber ownership will remain unchanged while independent branding and business operation will be maintained for each party.
Regarding regions of network construction, both parties will delineate and designate districts in 15 cities for each party to build 5G network, mainly with reference to the total scale of 4G base stations (including indoor distribution systems) of both parties. In the 5 Northern cities, namely Beijing, Tianjin, Zhengzhou, Qingdao, Shijiazhuang, the ratio of construction districts of China Unicom to China Telecom will be 6:4 while in the 10 Southern cities, namely Shanghai, Chongqing, Guangzhou, Shenzhen, Hangzhou, Nanjing, Suzhou, Changsha, Wuhan, Chengdu, the ratio of construction districts of China Unicom to China Telecom will be 4:6. China Unicom will be solely responsible for the construction in 9 prefecture-level cities in Guangdong province, 5 prefecture-level cities in Zhejiang province and 8 Northern provinces (Hebei, Henan, Heilongjiang, Jilin, Liaoning, Inner Mongolia, Shandong, Shanxi) other than the regions mentioned above. China Telecom will be solely responsible for the construction in 10 prefecture-level cities in Guangdong province, 5 prefecture-level cities in Zhejiang province and 17 Southern provinces (Anhui, Fujian, Gansu, Guangxi, Guizhou, Hainan, Hubei, Hunan, Jiangsu, Jiangxi, Ningxia, Qinghai, Shaanxi, Sichuan, Xizang, Xinjiang and Yunnan) other than the regions mentioned above.
Both parties will adhere to the principles of maximizing the benefit of co-build and co-share, favoring sustainable cooperation and not profiting from settlement, striving to insist on fair and equitable market-oriented settlement and formulating reasonable and precise settlement methods.
China Unicom is of the view that the cooperation with China Telecom on 5G network co-build co-share, especially co-sharing the continuous 5G spectrum of both parties, will enhance the reduction of 5G network construction, operation and maintenance costs, while achieving 5G network coverage efficiently. It will also benefit the establishment of 5G service capabilities rapidly and strengthen the market competitiveness of 5G networks and services, while improving network investment return and asset operation efficiency.
Keywords: China Telecom China Unicom wireless network construction 5G 0728.HK 0762.HK 600050.SH CHA CHU
Sending
