China’s three largest telecom companies sold $36 billion worth of tower assets to China Tower Corporation, a joint venture set up by the companies themselves, to expand 4G network coverage and boost efficiency. China Towers offered the three state-owned companies (China Mobile Ltd, China Telecom Ltd, and China Unicom Group Co) a mix of cash and stocks in the deal.
Upon the completion of the sale, China Mobile will own 38 percent of China Tower’s shares, and China Telecom and China Unicom will each own 28 percent. The deal will allow China Tower to operate 1.5 million telecom towers and their ancillary assets in China. The three companies are in the process of negotiating tower usage fees with their joint venture.
China Tower, formerly China Communications Services Corporation, was jointly set up by China Mobile, China Telecom, and China Unicom in July 2014 to cut redundant construction of telecom towers for a 4G network. The extended 4G network coverage from combining tower assets will allow Chinese telecom companies to better compete with mobile messaging services like WeChat that are replacing traditional messaging and voice-call.