China Telecom to benefit most from mainland tower venture

China Telecom is the biggest beneficiary of the proposed network towers venture between the three mainland telecommunications carriers, as it has the least number of existing towers, the company said.

"The establishment of the venture will avoid construction of redundant projects. China Telecom has the smallest number of towers among the three so we will benefit most from the sharing of resources," said chairman and chief executive Wang Xiaochu.

The firm earlier announced a capital expenditure of 80.3 billion yuan (HK$100.78 billion) for 2014, half of which will be spent on 4G-related construction. Wang did not elaborate on how the venture will impact the firm's spending. "Though it cuts spending on construction, renting of the facilities will rise," he said.

The venture will be mainly responsible for operating and maintaining the mainland's telecommunications towers and the three carriers will rent services instead of building towers of their own.

China Telecom faces intense competition from rival China Mobile, which took the lead to launch TD-LTE fourth-generation mobile phone services at the end of last year. TD-LTE is a self-developed 4G system in China but China Telecom prefers to operate on the FDD-LTE networks that are more popular internationally.

China Mobile lowered the price of its 4G service by about 40 per cent this month to attract subscribers. The entry-level monthly data package is now 30 yuan for 500 megabytes. China Telecom had been losing users in the first quarter though subscribers to its 3G services are rising. The total number of mobile subscribers was 183 million, representing a decrease of 2.38 million.