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China Wireless Carriers Soar on Savings From 5G Cost-Share Plan

China Wireless Carriers Soar on Savings From 5G Cost-Share Plan

(Bloomberg) -- China’s big three wireless carriers soared after China Unicom (Hong Kong) Ltd. Chairman Wang Xiaochu said his company was close to an agreement to share resources for building a 5G network.

Joint investment with one of two rivals -- China Mobile Ltd. or China Telecom Corp. -- on the superfast network will start next year, Wang told reporters on Wednesday after the company’s earnings filing. Sharing 5G infrastructure could save the companies involved as much as 270 billion yuan ($38 billion) in capital expenditure over the next five years, Kevin Chen, an analyst at China Merchants Securities Co., wrote in a note to clients.

China Unicom gained as much as 12% on Thursday in Hong Kong, the biggest intraday gain since August 2011. China Mobile, the country’s No. 1 operator, jumped 6.5%, the most in four years, while China Telecom rose 7.4%, the most in three years. Shanghai-listed China United Network Communications Ltd., technically China Unicom’s parent, climbed 6.5%.

China’s operators are barreling ahead to deploy 5G under a mandate from the government to build the latest networks to promote development of technologies like robotics and autonomous driving. Investors have been concerned that the pressure to introduce 5G, along with government calls for lower rates and better 4G services, would erode carriers’ profit.

China Tower Corp., which effectively runs all of the country’s mobile-phone towers, slumped in Hong Kong on concern a 5G infrastructure alliance between China Unicom and a rival could reduce the number of tenants available. The stock fell as much as 7%, the biggest intraday loss in almost three months.

To contact the reporter on this story: Shirley Zhao in Hong Kong at xzhao306@bloomberg.net

To contact the editors responsible for this story: Sam Nagarajan at samnagarajan@bloomberg.net, Dave McCombs

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