China Unicom confirmed on Monday that it will partner with rival China Telecom to jointly build a 5G network as the country’s carriers scale back individual investment budgets amid a slump in revenue growth.
Why it matters: While the Chinese government is calling for a quick rollout of the next-generation wireless network, the country’s big three network operators, which also includes Chinese Mobile, are seeking ways to cut costs.
Telecom operators face increasing margin pressures from decelerating 4G user growth and government mandates to lower mobile phone tariffs.
An investment of RMB 1.23 trillion ($170 billion) is needed to build China’s 5G networks, according to securities firm China Securities International.
China Telecom said it would invest around RMB 9 billion in the construction of 5G networks this year, while China Unicom announced a planned investment of RMB 8 billion.
China Mobile raised its budget for 5G to RMB 24 billion last month, after previously allotting a 5G budget flat to last year, or around RMB 17 billion.