The blueprint for establishing a single base station supplier for China’s three telecommunication carriers has been finalized, signaling a deeper restructuring and integration of the sector, Caijing.com reported Tuesday, citing an unnamed person involved in drafting the plan.
The National Base Station Company will be funded jointly by China Mobile Ltd. (00941.HK), China Telecom Corp. Ltd. (00728.HK) and China United Network Communications Group Co. Ltd. (China Unicom) (00762.HK, 600050.CN) and operated by the government, the report said.
According to the plan, the three carriers will no longer build base stations but just rent them from the company, which will be responsible for running them. Existing base stations, towers and conduits will be gradually transferred to the new company as well.
The plan is consistent with reports that the government is working to separate telecom network operations and the carriers’ client businesses. Such a structure will give the government monopoly over the telecom network while the three telcos will focus on data businesses, the financial news website said.
China is entering the era of 4G telecommunications, which requires the rapid construction of 4G networks over the next three years. China Mobile plans to build 500,000 4G base stations by the end of the year, which is expected to be transferred to the new company in the future.
The plan is not as easy as it looks to implement, and may encounter some resistance from the three carriers. Also, a monopoly of base stations may slow down the pace of technology upgrades, the report said.
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