China Tower – following the footsteps of Indus Towers in India, is planning to build 1 million telecom towers over the next two years.
Chinese wireless players — China Mobile, China Unicom and China Telecom are the joint venture partners of China Telecom that will own and operate cell towers. China Mobile has 40 percent, China Unicom 30.1 percent and China Telecom 29.9 percent stake in China Telecom.
Indus Towers is jointly owned by three major telecom carriers – Bharti Airtel, Vodafone India and Idea Cellular – in India.
China Tower will take over RMB 100 billion ($16.3B) worth of the carriers’ tower assets within a year. The objective of the telecom tower company is to improve efficiency, while Chinese telecom service providers can focus on bettering customer experience.
Telecom industry analysts expect that the joint venture could give China’s carriers a better way to monetize their tower assets. Many non-Chinese carriers such as Bharti Airtel have monetized their telecom towers by selling them to independent, U.S.-based, tower owners including America Tower Corporation.
“The outsourcing of tower maintenance allows operators to focus on their core businesses, while tower companies will be able to achieve economies of scale through the large number of towers they acquired,” said Jake Saunders, VP and Practice Director of Core Forecasting, ABI Research.
ABI Research in a November 2014 research report said mobile operators are actively reducing their operating cost through tower outsourcing agreements. For instance, MTN Nigeria transferred its tower business to IHS and allowed IHS to have full control over 9,151 towers and Bharti Airtel sold 3,500 towers to Helios Towers for $2 billion.
Baburajan K
editor@telecomlead.com
