Telco tower plan no boon to ZTE, company says

May 02, 2014 19:10
ZTE has felt no impact from a plan by three mainland telcos to build communications towers. Photo: Bloomberg

ZTE Corp. (00763.HK), one of the nation’s leading telecoms equipment makers, said Friday that a decision by three mainland telcos to jointly build communication towers has not had any effect on the company. 

ZTE said it only builds base stations for Chinese telcos -- not communication towers. 

The clarification followed a UBS research report Thursday that the establishment of a joint tower company will boost the pace of telco investment in 4G base stations, benefiting ZTE.

China’s three largest telecommunications carriers are in talks to set up a joint venture to develop infrastructure for mobile communication towers, according to the Ministry of Industry and Information Technology. The new venture will promote environmental protection, cut costs and benefit users, the ministry said Wednesday.

A day earlier said China Mobile Ltd. (00941.HK), China Telecom Corp. Ltd. (00728.HK) and China United Network Communications Group Co. Ltd. (00762.HK, 600050.CN) will set up a national communications tower company to be operated by the government. 

The move is part of Beijing’s efforts to avoid duplication of investment in the telecom sector, by separating telecom network operations and the carriers' client businesses.

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