China Tower plans to speed up 5G network construction without increasing spending
Ahead of its Hong Kong public offering, the telecoms infrastructure firm looks to step up its appeal to investors
Chinese telecoms infrastructure firm China Tower plans to speed up the construction of 5G networks and keep costs down by making use of electric power companies’ transmission towers, as it seeks to appeal to investors ahead of its Hong Kong share offering.
At a media briefing on Tuesday, it said it had already signed agreements with China's two major power grid operators to share their transmission towers, with a view to keeping its capital spending at a stable or slightly lower level and boosting cash flow and shareholder value.
“The 5G era is coming in China. There will be a sharp increase in demand for 5G base stations, and it can bring exciting new opportunities for us,” Tong Jilu, chairman and general manager, told the briefing.
“I'm confident our capital expenditure will not increase sharply when the 5G era comes,” he said.
The world's largest telecoms tower operator will kick off the Hong Kong retail offering on Wednesday, seeking to raise as much as US$8.7 billion. It will be the world's biggest share offering since Chinese e-commerce giant Alibaba raised US$25 billion in its listing in New York in 2014.
China Tower, more of 90 per cent of which is owned by China’s top three telecoms carriers – China Mobile, China Telecom and China Unicom, plans to use 60 per cent of the proceeds for capital expenditure, including building new towers and upgrading existing ones, while the rest is for repaying bank loans and working capital purposes.