China Mobile has won access to the valuable 700MHz band after striking a network-sharing deal with new entrant China Broadcasting Network Corporation (CBN).
In a statement issued Wednesday, China Mobile said the two parties would jointly build and share a 5G network and also collaborate in content and platform sharing.
The partnership between China's telecom behemoth and its minnow has been widely expected for some months.
But it is much broader than the one between China Unicom and China Telecom – a partnership between equals that is limited to construction and capacity sharing.
For China Mobile and CBN, joint network investment and construction at a 1:1 ratio is just one part of their arrangement, which will continue until 2031.
They will jointly own and share the capacity, but China Mobile has committed to wholesaling capacity on its 2.6GHz 5G network to its smaller partner.
In areas where the 700MHz band is not yet commercially available, it will open up its 2G and 4G networks.
Additionally, the telco will also provide a series of key services on a commercial basis: network maintenance and operations, backhaul and international services.
China Mobile's statement said while the two partners would retain their own brands, they would explore further joint efforts in areas such as products, operations and content and even in "channels and customer services."
For China Mobile, which already has 260MHz of 5G spectrum in the 2.6GHz and 4.9GHz bands, the partnership adds to its spectrum inventory and in particular access to precious low-band frequencies.
It also means potential for valuable content partnerships with the country's national cable TV operator.
The downside is that the telco giant is yet again footing the bill for a national policy exercise. It funded the development of China's 3G technology. Now it must put its hand in its pocket to build a network that in part duplicates its existing 5G deployment.
China Mobile's stock rose 0.92% in Thursday trading in Hong Kong, suggesting investors have already factored in a CBN partnership.
For CBN, with approximately one-tenth the annual income of its senior partner, the arrangement is its only possible path to viability.
It still needs to co-build approximately 400,000 basestations nationwide.
A 700MHz network is estimated to cost less than one built using 3.5GHz spectrum, the preferred 5G band.
While it has acquired a strong partner and access to China Mobile's networks and expertise, the financial terms are not clear.
But the new partnership opens up new revenue streams and ways to monetize its huge library of video content.
— Robert Clark, contributing editor, special to Light Reading