China’s Top 3 Telcos to collaborate on 5G network construction, shares prices soar
China Knowledge Online
Aug 16, 2019

Aug 16, 2019 (China Knowledge) - China's top three largest telecommunication companies China Unicom (CHU), China Mobile (CHL) and China Telecom (CHJHF) have entered negotiation over cooperation on the construction of expensive new 5G network. Shares of the three telecom giants rallied yesterday as the message released.

China Mobile as the country’s dominant carrier accounts for 60% of the market and China Unicom and China Telecom control the rest shares.

Amid the ongoing China-US trade dispute, the U.S government has banned American suppliers from selling technologies and products to Huawei, China’s leading 5G equipment-maker and the world’s largest telecom equipment maker. The move makes China to take a stronger resolution to make the country a leader in 5G technology which is fundamental for development in telemedicine and autonomous driving. The Chinese government has been encouraging the three wireless carriers to join hands in the construction, operation, and maintenance of the 5G network. The President of Unicom Wang Xiaochu confirmed that the company has held talks with another two firms about such collaboration.

At Unicom’s Hong Kong event to discuss the company’s latest financial results on Wednesday, the company said RMB 58 bln is planned for capital spending this year, among which RMB 8 bln would be used for 5G network construction.

Such remarks gave investors relief. Previously, many investors concerned that carriers would pump substantial capital into 5G construction to meet the government’s targets. The day after the event, China Unicom jumped more than 11% in late afternoon trading in Hong Kong. Meanwhile, China Mobile and China Telecom achieved gains of 5.3% and 6.8% respectively.

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