China Tower has found a new way to monetize its massive network of cellsites -- surveillance.
The infrastructure company, jointly owned by China's three big operators, has just signed a partnership with AI firm Sensetime to carry out video surveillance from its 1.9 million sites.
Beijing-based Sensetime -- with a $4.5 billion valuation making it the world's biggest AI unicorn -- specializes in facial recognition.
China Tower has also landed a contract with an insurance company, Pacific Property Insurance, to carry out AI analysis on insurance claims.
It is part of the company's fastest-growing business, known awkwardly as trans-sector site application and information (TSSAI).
The tower company's sites are attractive to any business or government agency that wants to track vehicle or human traffic, oversee natural resources or monitor a large-scale IoT project.
In the first half the unit posted a 125% hike in sales to 843 million yuan ($118 million). Combined with the other non-core business, DAS, the new segments accounted for 6% of total operating revenue.
This is a handy increment at a time when China Tower's upside has been crimped by the China Telecom-China Unicom network sharing agreement.
To drive the new surveillance business, China Tower set up a new subsidiary, Smart Tower, in June, with registered capital of RMB1 billion ($130 million).
Smart Tower describes itself as providing "high-end video surveillance and data information services," state news agency Xinhua reports.
Target customers are emergency and security services, radio and television, high-speed rail, resource companies, environmental protection agencies and land and water resources departments.
At a recent tradeshow, it demonstrated monitoring tech for use cases ranging from forest fire prevention and maritime security to weather, earthquake and illegal farmland construction monitoring.
The company said the new Sensetime partnership it would enable it to "deeply integrate video surveillance with big data and AI" and "explore the value of high-level video surveillance resources and data to bring high-efficiency intelligent monitoring, surveillance and forecasting to many industries."
While China Tower looks to have discovered a promising niche, it is not a business model that big players outside China are pursuing.
Although European tower firm Cellnex is offering smart city services, US tower companies such as Crown Castle and American Tower, and India's Indus Towers, are strictly focused on wireless.
Privacy laws are one sensitivity Chinese firms don't have to deal with. While San Francisco has just banned AI facial recognition, in China it is deployed with few constraints from street cameras to the classroom.
Besides surveillance, China Tower is also pursuing the energy business, leveraging its expertise in powering basestations to provide power backup and battery exchange. It is currently running some pilot projects.
— Robert Clark, contributing editor, special to Light Reading