What exactly is a tower company?
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Not long ago, China Mobile, China Unicom and China Telecom successively announced that they would jointly establish China Communications Facilities Services Co., Ltd., commonly known as the "Tower Company". There are many different opinions about this company, and many concepts are difficult to clarify. What is the relationship between this newly established tower company and the three major operators, and what is the business division? What impact may it have on the development of the telecommunications industry? The monopoly position of the three major operators has always been criticized. Will this newly established tower company exacerbate the monopoly of the telecommunications industry, or will it, like the virtual operators, make the telecommunications industry tremble towards the direction of marketization? Why do we need a tower company? At present, when the three major operators have or are about to enter the 4G era, the demand for base stations and towers is increasing. Paying attention to the frequency band information of the 4G network, you can know that due to the high frequency characteristics of 4G, its site density needs to be more than twice that of 2G/3G sites to achieve good coverage. Another reality that must be faced is that cities are developing faster and faster, and land resources are becoming more expensive and scarce, and fierce competition and conflict are inevitable among the three major operators. As early as 2008, the Ministry of Industry and Information Technology issued a document to promote the co-construction and sharing of telecommunications infrastructure, curb unfair competition, and avoid repeated construction of towers in the same location, but the document is still a dead letter. The three major operators are at loggerheads with each other, and it is definitely impossible to expect them to hand over their resources to others. An employee who once worked at the Ministry of Industry and Information Technology's Telecommunications Research Institute said: "The result of market competition leads to location monopoly and even signal monopoly in the region. This is the failure of the market and the result of the government's lack of planning." Another reason is that the rapid growth of Internet OTT business has greatly impacted the operators' call and information basic services. This part of the business has declined significantly, directly leading to a decline in the operators' profit margins. In addition, in the 4G era, the density of base stations is required to be greater, and the new infrastructure funds that operators need to invest are also calculated in hundreds of billions. In addition, the later maintenance costs of towers and base stations are also very high. The cost of a single base station is about 1 million yuan, and the later maintenance costs are even millions of yuan. Some industry insiders have calculated that if the three major operators jointly close 100,000 base stations, the expenditure can be reduced by more than 200 billion yuan, and the land area returned will reach tens of thousands of acres. Because of the waste of resources caused by competition, the cost pressure brought by 4G, the business impact brought by Internet manufacturers and virtual operators, etc., it is impossible to rely on the policy pressure of the government and the Ministry of Industry and Information Technology, or for operators to abandon their prejudices and share resources out of kindness. However, reform is imperative, so the establishment of a "tower company" and a third-party agency to undertake tower construction and other businesses has become an option. In the long run, this is also a pattern required by the market-oriented operation mode of "network neutrality and network separation". The establishment of the tower company is the first small step in this direction. What is a tower company? On March 26 this year, the State-owned Assets Supervision and Administration Commission took the lead and organized the three major operators to hold a coordination meeting in conjunction with the Ministry of Industry and Information Technology to discuss important issues involved in the establishment of the tower company and clearly set up a coordination group and a preparatory group for the tower company. Subsequently, China Mobile, China Unicom and China Telecom, the three major operators, issued an announcement stating that they jointly signed the "Promoter Agreement" on July 11, 2014 and would invest in cash to establish China Communications Facilities Services Co., Ltd. The registered capital of the tower company is 10 billion yuan. China Mobile, China Unicom and China Telecom will invest 4 billion yuan, 3.01 billion yuan and 2.99 billion yuan respectively, holding 40%, 30.1% and 29.9% of the shares respectively. The corresponding data is that in the 2G/3G era, the total number of base stations built by the three major operators exceeded 1.4 million. Among them, China Mobile has at least 700,000, China Unicom has more than 400,000, and China Telecom has about 300,000. After the establishment of the tower company, it will mainly engage in the construction, maintenance and operation of towers, and also engage in the construction, maintenance and operation of supporting facilities such as base station rooms, power supplies, air conditioners and indoor distribution systems, as well as the maintenance of base station equipment. At present, the three operators are considering injecting a certain amount of telecommunications assets into the tower company. It can be seen that the tower company is not involved in the base station construction business, which is the most closely related to the network and the most core, but the peripheral equipment and services of the base station. This is far from the initial rumors of the establishment of a "base station company" and the direct promotion of "network industry separation". In the announcement, the three major operators said that the benefits of establishing a tower company are that it can reduce the duplication of towers and related infrastructure in the domestic telecommunications industry, improve the efficiency of industry investment, further improve the level of co-construction and sharing of telecommunications infrastructure, and alleviate the problem of difficult site selection for enterprises. In terms of level and ownership, the National Tower Company is under the jurisdiction of the State-owned Assets Supervision and Administration Commission, and its top leader will be appointed by the Organization Department of the Central Committee. In other words, the new National Tower Company is on an equal footing with the three major telecom operators. However, there are other reports that Liu Aili, vice president of China Mobile, will concurrently serve as chairman of the tower company and join the board of directors of the tower company, Tong Jilu, deputy general manager of China Unicom, will serve as general manager of the tower company, and a senior executive of China Telecom will serve as deputy general manager. In addition, the introduction of private capital, which was highly sought before, has also been shelved. It was previously rumored that the three major operators held 51% of the shares in the tower company, and the remaining 49% would be introduced by private capital. Now, judging from the announcement, the three major operators hold 100% of the shares, and the progress of introducing private capital has been postponed. It is impossible for private capital to enter for at least one year. Such progress also shows that the current announcement shows that the tower company has only finalized the general framework, and more business details need to be negotiated and improved later. However, this period will not be too long, and the tower company is expected to be listed and established in the third quarter. Ideals are full, but reality is skinny From the various problems exposed in the early stage of virtual operators, it can be seen that the reform of the telecommunications industry is doomed to be not smooth. This is also consistent with the huge contrast between the initial rumors of the tower company and the current situation. Introducing private capital, separating the network and the industry, and independent development will not be achieved all at once. In fact, the tower company is said to be a third-party company and a relatively market-oriented institution, but it still has the suspicion of monopoly in the end. Judging from the possible composition of the company's executives, the tower company will still be controlled by the three major operators. The biggest problem is that the tower company's main business is the construction and maintenance of towers, but there are already many tower construction companies in the market, and it is still a question how much tower construction rights the operators will retain in the future. If all are built by the tower company, a monopoly situation will inevitably emerge, and the survival of other tower construction companies in the market will also be a problem. If the operators retain the right to build towers, the original intention of establishing the tower company will be greatly reduced, and the three major operators will still fight on their own. Correspondingly, the tower company will either build its own tower construction team and technology, or continue to outsource to existing tower construction companies in the market. The former option requires huge preparation funds and human administrative costs, and the latter means that the tower company is only a transit operator. In addition, China Telecom also has China Communications Services Co., Ltd., which was established in 2006 and mainly provides network construction, outsourcing services, content applications and other services for communication operators, dedicated communication networks, government agencies, enterprises and institutions. This will overlap with the tower company's business. The announcement shows that the tower company will give priority to China Communications Services under the same conditions when publicly outsourcing the design, construction, supervision and maintenance of its towers and tower-related ancillary facilities to the society. This may mean that the tower will not form its own construction team in advance, and the business will be mainly subcontracted. Operators are also worried because they are not facing consumers. Tower companies have tower resources, no pressure, no competitors, and no motivation. The quality of site construction and willingness to maintain are difficult to solve. Because the future development possibility is that operators rent towers from tower companies. When consumers are dissatisfied with the services of operators in the future, the direct operators and tower companies will be responsible. It is very likely that the situation of passing the buck will occur. Some professionals believe that: "The construction of the national tower company is the top-level design of the infrastructure of a strong network country. If there is no goal and dilemma of 4G network construction, there will be no tower company now. It is here to break the dilemma of 4G network base station construction. If it cannot do this, the tower company will be a transitional, dead-end monopoly operator." Therefore, if the tower company is established for the purpose of avoiding duplication and reducing costs, this vision is short-sighted. The ultimate possibility is to create another state-owned enterprise with absolute monopoly and low efficiency. Tao Xujun of Nomura Research Institute believes that it is impossible to evaluate the impact of tower companies at present. The tower company that is being rumored is still just a vague name. To what extent and how much network assets will be divested by operators? If operators are not satisfied in the future, can they still build their own? What can the tower company do in the future? Should the operation and maintenance of the network also be handed over to the tower company? These questions have not been answered yet. It can be seen that with various questions, market researchers, operators, and ordinary consumers have not expressed a positive expectation for the tower company that will be listed. As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity. |
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