US-based VelaTel Global Communications, formerly known as Chinatel, has signed an agreement with New Generation Special Network Communication Technology (NGSN) to form a joint venture to provide 4G services in China. The telcos will deploy a Time Division Long Term Evolution (TD-LTE) network, with equipment supplied by Chinese vendor and strategic partner of VelaTel, ZTE; the infrastructure will be owned by the joint venture. VelaTel will provide financing, as well as engineering and network management services. NGSN, meanwhile, is the service licence holder, having been issued a nationwide concession to provide value added services (VAS), location-based tracking and other information services by the Chinese government, and will act as an anchor tenant on the network. The agreement is expected to be finalised and the joint venture company formed before end-2011.
CEO of the US-based telco, George Alvarez, commented: ‘The NGSN project represents an expansion and diversification of the services VelaTel delivers, particularly in China. Instead of a retail consumer model, and the attendant challenges of marketing budgets and competition with other carriers for subscribers, this transaction reflects a business-to-business model, with NGSN acting as both the ‘anchor tenant’ and the broker, with a financial incentive to expand the network’s paid users by recruiting other affiliated businesses.’