On May 20, China Telecom Operator (CMCC) announced that it has recently signed a 5G network cooperation framework agreement with China Broadcast Network (CBN) to carry out 5G network construction and product and operation platform cooperation to achieve a total of win.
In terms of 5G network cooperation, the two parties will maintain their own brand and operational independence, jointly explore product and operational innovation, and carry out in-depth cooperation on content, platform websites, sales channels, and customer service. The cooperation period is 10 years.
The CMCC said that the joint construction of 5G networks is a measure taken by both parties to respond to the government's call to accelerate the development of 5G networks and implement the 5G network infrastructure strategy. It can effectively help the construction of the 5G network industry and promote 5G network innovation and industry development. Through cooperation, the two parties can take advantage of 5G network technology, frequency resources, content and other aspects, intensively and efficiently achieve 5G network coverage, and enrich 5G network services.
In June 2019, the Ministry of Industry and Information Technology issued commercial licenses for 5G networks to four companies, China Mobile Communications, China Unicom (CUCC), China Telecom (CTCC) and CBN. However, the high cost of 5G network construction has also become a problem faced by the four companies.
Prior to this, CUCC and CTCC have announced the joint construction of 5G. The chairman of CUCC, Wang Xiaochu, revealed in March this year that the joint construction of CUCC and CTCC has saved about 10 billion yuan in costs. According to the overall estimates of both parties, the cooperation will save more than 40% of investment.
CMCC and CBN also have good conditions for the joint construction of 5G networks. Earlier this year, the Ministry of Industry and Information Technology granted CBN a 5G test frequency license for the 4.9GHz band and agreed to deploy 5G networks in 16 cities including Beijing. Moreover, the 4.9GHz band obtained by CBN is consistent with CMCC.
This cooperation is because CBN wants to issue mobile phone cards as soon as possible, but CBN has no experience in mobile communications, and after cooperating with CMCC, it is equivalent to exchange the 700MHZ frequency band for China Mobile's mobile phone card resources.
In addition, CMCC's 5G network construction expenditure this year is as high as 100 billion yuan, and the investment is huge; and CBN also has difficulties in starting the base station construction late and lacking funds. The cooperation is even more powerful for the construction of 5G networks on both sides, and the CBN operation dominance is more stable.
In this way, China's 5G network operators have formed a market pattern of CUCC + CTCC and CMCC + CBN.