China Telecom, one of the country’s three major wireless carriers, embraced a plan to share resources and costs in the construction of new 5G networks, following rival China Unicom in a move that could save billions of dollars.
The company is considering building and sharing a 5G network with China Unicom, China Telecom Chairman Ke Ruiwen said Thursday in Hong Kong.
China Unicom said last week it’s talking with other carriers about cooperating on 5G network construction, responding to the government’s call for the three state-owned carriers to join hands on building, operating and maintaining the next-generation wireless networks to reduce costs. China Unicom Chairman Wang Xiaochu said network-sharing could save 200 billion yuan ($28 billion) for each company. Investors bid up the companies’ shares the following day.
Ke said the resources of China Telecom and China Unicom are highly complementary, making it easier to cooperate in the 5G era. The two companies set up a joint team to explore cooperation, Ke said.
China Telecom said earlier this year it planned to invest 9 billion yuan and build 40,000 5G base stations by the end of the year, similar to China Unicom’s target. Larger rival China Mobile said it would build 50,000 bases stations and invest 24 billion yuan this year.
After taking a more cautious stance in previous generations of wireless network-building, China has become far more aggressive in building 5G networks that will power cutting-edge services of the future like telemedicine and autonomous driving. But the urgency to build new networks also sparked worries among investors that carriers might sharply increase spending to meet the government’s targets. A shared network might ease such concerns.
China Telecom also reported Thursday a 1.32% decline in first-half revenue to 190 billion yuan. Net profit rose 2.5% to 13.9 billion yuan. As of June 30, China Telecom had 323 million mobile users, including 266 million 4G users.