China Unicom saves USD295m through network sharing; Telefonica prepares to sell final 1% stake in cellco

8 Nov 2016

China Unicom, the country’s second largest mobile operator in terms of subscribers, has saved more than CNY2 billion (USD295 million) in CAPEX this year, as a result of its network sharing agreement with rival operator China Telecom. According to Mobile World Live Asia, which cites data from local news site, the country’s second and third largest wireless players announced a strategic tie-up earlier this year, in a move that was seemingly designed to boost their respective competitive positions against runaway market leader China Mobile. In August the two companies said that they each expected to reduce CAPEX by as much as CNY3 billion this year by jointly building 4G base stations and a fibre-optic network. The report goes on to note that China Unicom has built 700,000 4G base stations since 27 February 2015, upgrading its entire network in 341 cities. The figures were revealed by Ma Hongbing, China Unicom’s deputy general manager for its network construction department.

In other news, Spanish telecoms giant Telefonica is reportedly planning to offload its final 1% stake in China Unicom, effectively terminating its long-term partnership with the Chinese cellco. The development was reported by El Economista, which cites a filing to the National Securities Market Commission (Comision Nacional del Mercado de Valores, CNMV). The report notes that the stake sale could generate around EUR270 million (USD299 million). According to TeleGeography’s GlobalComms Database, Telefonica International holds roughly 1.00% of the company’s shares, having sold a 1.51% stake in July 2016 for HKD2.88 billion (USD371.45 million). The Spanish group had previously reduced its interest in Unicom from 5.01% to 2.51% in November 2014, when it sold a 2.50% stake for HKD6.66 billion.

China, China Telecom Corporation, China Unicom, Telefonica