Business· TMT

China Unicom teams up China Telecom to build 5G network, USD 56 bln saved

minutes 2019/09/10 06:45:21
5G, China Unicom, China Telecom, China Mobile,

Sep 10, 2019 (China Knowledge) - China Unicom (CHU) and China Telecom (CHJHF), two of China’s top three largest telecommunication companies, have entered a partnership to jointly build and share 5G network in the country.  Such cooperation is estimated to save billions of dollars of cost in constructing new 5G infrastructure.

The two companies will team up to build the access network which is for connecting subscribers to their service provider, but they both will construct and operate their backbone networks independently.

According to the agreement, China Unicom will be in charge of 5G network construction in 8 northern provinces, and China Telecom will handle that in 17 southern provinces. Meanwhile, the two will co-build the network under an agreed ratio in big markets including Beijing, Shanghai, Zhejiang, Guangdong, Chongqing, and Hangzhou. Each of the two will invest and maintain networks they built independently but will ensure the network planning, construction, and services are in accordance with the same standards.

Beijing has viewed 5G technology as a competitive edge for the country to stand out in the fierce tech rivalry worldwide. In June, China’s Ministry of Industry and Information granted the first 5G commercial licenses to China Telecom, China Mobile and China Broadcast Network Corp.

To meet the government’s targets on 5G network construction is costly. Analysts estimate more than RMB 1 trln is needed to build 5G networks with the equivalent coverage of the existing 4G network. Nevertheless, the Chairman of China Unicom Wang Xiaochu said last month that network-sharing could save RMB 200 bln for each company. Moreover, all of the top three telecom giants closely in touch with each other and other parties for potential partnerships on 5G construction.

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