China establishes joint infrastructure company for mobile operators

China’s three leading mobile operators are to jointly establish a new firm to construct, maintain, and operate their cellular infrastructure, as they face the massive rollout of 4G across the country.

In a filing, the three companies agreed to set up a new firm called China Communications Facilities Services Corporation with a share capital of RMB10 billion (US$1.6 billion).

China Mobile will hold 40 per cent of the venture while rivals China Unicom and China Telecom will each have 30 per cent stakes.

China Mobile said the joint venture will reduce duplication and unnecessary construction of cellular towers, so improving investment efficiency. The country’s largest operator said the move would also enable it to better utilise existing assets.

The Chinese operators announced their intention to set up the venture at the end of April.

Discussions are at a preliminary stage in terms of which assets will be included in the deal, which will handle construction, maintenance and operation of infrastructure.

The three operators do not explicitly mention 4G but all three face a massive project to rollout LTE services across the country.