State infrastructure firm sparks monopolisation concerns

6 May 2014

Talks regarding the possible creation of a joint venture infrastructure firm have sparked concerns that the monopolisation of such resources could result in price increases, China News Service writes. State-backed telcos China Mobile, China Telecom and China Unicom are currently discussing the potential establishment of a jointly owned infrastructure firm that would be responsible for building and maintaining the operators’ towers with a view to improve infrastructure sharing, thereby cutting operating expenses. The recent launch of 4G services has prompted a surge in base station construction, and tower sharing is seen as a possible solution to emerging problems of overlapping investment, misuse of land and wasteful energy consumption. The plan has its downsides, however, and Zhang Xinzhu, the director of the Research Centre for Regulation and Competition at the Chinese Academy of Social Sciences, told press that the creation of a state-owned facilities builder would drive up fees, saying: ‘If the upstream base stations resource is monopolised, the downstream fees will be raised.’