On October 13th, China Tower Company signed a trade agreement with China Telecom, China Mobile and China Unicom (hereinafter referred to as "three major telecom operators") and China Reform Holdings Corporation Limited (hereinafter referred to as "China Reform"), the Tower Company will purchase all the existing tower assets of the three major telecom operators and gradually introduce China Reform as a new shareholder.
Previously, the three major telecom operators and the Tower Company jointly carried out inventory assessment of the stock assets, the assessed value of the relevant tower assets was approximately CNY 231.4 billion. The Tower Company will purchase the mentioned assets through a combination of issuing shares and cash.
In addition, the Tower Company will issue new shares to China Reform simultaneously. After the completion of the transaction, China Mobile will hold 38% of the Tower Company’s shares, and 28.1%, 27.9% and 6% for China Unicom, China Telecom and China Reform, respectively. The signing of this agreement means the Tower Company will soon complete the second strategic target of stock assets injection after obtaining the rapid tower-building capacity, and the Tower Company will comprehensively carry out the operation and management work of the relevant tower assets.
Acquisition of the stock tower assets of the three major telecom operators is an important foundation for the Tower Company to achieve intensive, large-scale, professional and efficient operation. After the transaction, the Tower Company will extensively play the scale effect, improve the facilities sharing rate and reduce the single tower operation and maintenance cost through efficient operations and management, therefore meet the three major telecom operators’ needs for 4G and other communications infrastructure and promote long-term healthy development of the industry.
For the three telecom operators, they could fully share the Tower Company’s resources in the future, therefore they could save a lot of investment and operation and maintenance cost, focus on the core business operations, improve market competitiveness and accelerate the transformation process. In terms of the society, they will reduce the resource consumption, promote environmental protection and enjoy more universal services.
On July 18th, 2014, China Tower Company was officially established, which majors in the construction maintenance and operation of the towers, as well as the base station rooms, power supplies, air conditioning and other supporting facilities and indoor distribution system and maintenance of the base station equipment.
After establishment of the Tower Company, it determined the "three-step" strategy: the first is the rapid formation of construction ability of incremental towers, the site resources and ancillary facilities. The second is to complete the injection and delivery work of the existing assets of the three major telecom operators in 2015 and the last step is to become listed and achieve mixed ownership development.
In order to achieve the second step strategic target, the three major telecom operatorsand Tower Company jointly carried out inventory and assessment work of the existing tower assets from October 2014. With supports of each side, the inventory and assessment work has been finished successfully.