(Adds carriers considering telecoms asset injection)
BEIJING, July 11 China's three state-owned
wireless carriers have agreed to jointly establish a
telecommunications tower company with a registered capital of 10
billion yuan ($1.6 billion), the companies said in filings on
China Mobile Ltd, the world's largest mobile
carrier by subscribers, will hold a 40 percent share of the
company. China Unicom (Hong Kong) Ltd will subscribe
for shares equivalent to 30.1 percent of the company. China
Telecom Corp Ltd, the smallest of the three carriers,
will hold a 29.9 percent share.
The tower company, called China Communications Facilities
Services Corporation Limited, will "primarily engage in the
construction, maintenance and operation of telecommunications
towers," said China Telecom's filing to the Hong Kong exchange.
The carriers "are at a preliminary stage of considering the
injection of certain telecommunications assets," said China
China's three carriers have been under pressure from falling
revenues as mobile users switch from using SMS and voice calls,
formerly lucrative sources of income, to mobile Internet
services which instead rely on data such as Tencent Holding's
WeChat mobile messaging app.
The costly rollout of high-speed 4G mobile networks has also
weighed on the companies, each of which had to build its on
telecommunications towers to increase network coverage across
The joint tower firm could reduce individual spending by the
firms and allow them to share the infrastructure, as well as
increasing each carrier's network coverage and quality.
"We believe this will be net positive for all three
operators, and will likely result in lower future capex for
Telecom and Unicom and possibly new revenue streams for China
Mobile, as it sells or rents access to its towers," said Chris
Lane, a Hong Kong-based analyst with Sanford C. Bernstein, in a
May research note.
The establishment of the tower company will improve the
efficiency of investments and help reduce the overall scale of
investments, said China Telecom in its filing.
It will help "reduce duplication and redundant construction
of telecommunications towers and related telecommunications
infrastructure," said China Unicom in its own filing, echoing
the words of a similar filing by China Mobile.
The joint formation of a telecommunications tower company in
China has been expected for a number of months by industry
($1 = 6.2034 Chinese Yuan Renminbi)
(Reporting by Paul Carsten; Editing by Mark Potter)