Industry News

China Tower Faces Increased Pressure from New Lease Agreement

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Update time : 2016-07-14 16:40:28

China's three major operators respectively disclosed the commercial lease pricing on telecom towers & assets of China Tower last week.

The sharing rate becomes a key to the lease pricing on related assets, which means a 20% - 40% discount for two-side sharing and a 30% - 50% discount for tripartite sharing.

NRI said in the messege recently that China Mobile, China Unicom and China Telecom can save CNY 2.4 billion, CNY 1.9 billion and CNY 1.8 billion leasing cost respectively, equivalent to an increase of 1%, 2% and 2% of EBITDA for them.

The main difference from the original provision, according to NRI, is increased discount rate with joint tenancy and that China Tower is solely responsible for the financing costs which are not included in the rental cost. This implies a decrease in tower rent and larger operation pressure for China Tower because the company can only rely on itself to finance. To be listed in 2017, China Tower needs to further raise the operational efficiency. 


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