While the gradual flow of 5G services globally is a boon for telecom equipment manufacturers, connections from mobile operators in China, the world’s largest smartphone market, to build the network together threaten to cut the size of overall costs. 5G infrastructure.
China Telecom chairman Ke Ruiwen said on Thursday that the company had reached a tentative agreement with rival China Unicom to build a 5G network together where they will share part of the infrastructure, after China Unicom expressed interest in it last week .
China’s three major state-run telecoms are racing to roll out 5G services in more than 50 cities this year, following countries like South Korea and the United States that have already launched service that promises to support new technologies such as autonomous driving. .
China Telecom said Thursday that it is ready to build a 5G mobile network with its rivals in order to reduce costs, a proposal that is likely to cut multi-billion-dollar device orders for vendors such as Huawei Technologies.
The proposal also comes as Huawei is fighting a trade ban by Washington that has been hurting its business since May and could terminate its access to essential U.S. suppliers.
“Co-construction and co-ownership would bring huge savings in capital costs, operating costs, and improve resource use,” Ke said, without giving numbers.
Mobile operators seek to build networks together to share the heavy burden of capital spending, as their earnings growth is eased due to the slowdown in subscriber growth and government pressure to cut tariffs.
Both Ke and Wang said they are open to working with other players including China’s largest telecom operator China Mobile, with Ke saying it is “entirely possible” for the three to jointly build networks in the areas low population density, which would have “great cost savings”.
China Mobile did not immediately respond to a request for comment. Earlier this month, it announced an increase in its 5G capital spending this year to 24 billion yuan.
China Tower Corp., the telecom tower company jointly owned and divided by the three mobile operators, said earlier this month that it had received customer requests to install 65,000 5G base stations so far, a number expected to grow. to 100,000 by the end of the year./Investing.com