China Unicom and China Telecom confirm 4G partnership; deny merger

China Unicom and China Telecom have signed a cooperation agreement to compete more effectively against market leader China Mobile.

The deal will see the second and third-largest operators in the country pool their network construction efforts while also sharing infrastructure to extend their LTE offerings in a faster timeframe. The agreement will also see the firms cooperating on network recovery following natural disasters.

Yang Jie, general manager of China Telecom, noted that the operators would work together across a number of areas, including customer service, international roaming and smartphone standards. The deal is an attempt to improve operational efficiency while lowering overall expenditure.

The statement from Yang noted that the deal would not eventually result in a merger between the two operators, both of which are state-owned. Their rival China Mobile leads the market with 63% of the country’s overall mobile connections and hosts 80% of the market’s 370 million 4G connections. These 300 million subscribers constitute around 35% of China Mobile’s user base.

Meanwhile, Unicom has a 22% market share while China Telecom has 15%, with their overall combined 4G base totalling just 72 million. Their 4G disadvantage is likely due to the headstart China Mobile gained by opting to use the domestically developed TD-LTE standard, rather than the more widely used FDD-LTE technology.

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