• Will carve up Chinese cities so each player assumes responsibility for specific areas
• RAN and spectrum is shared, each player keeps ownership and control of its own core network

Chinese telco giants China Unicom and China Telecom, have announced plans to jointly build a China-wide 5G access network and then share it. The motivation, of course, is to vastly reduce the cost of rolling out 5G for both companies while increasing speed of deployment - a race against both time and the balance sheet.

Each company will take responsibility for constructing segments of the joint network in designated regions throughout China and will shoulder all the investment, maintenance and operating costs of the network in those regions. The companies say “the other operator will be able to share the access network and 5G spectrum resources, while retaining its own core network.” 

In other words, while they may share the RAN in each region, they will have their own wired network, core network and specific services which they will deploy in competition with each other.

Potential problems?

What’s to stop disagreement breaking out over who is doing a better job with the radio networks under their control in comparison with the partner? The telcos say they will “jointly ensure a unified standard on network planning, construction, maintenance and service in the 5G network co-build/co-share regions, and assure the same service level.”

Other potential sticking points include:

Who gets the children? “The subscriber ownership will remain unchanged while independent branding and business operation will be maintained for each party.”

What about third parties? “Any cooperation on network co-build/co-share by either party with a third party must not improperly harm the interests of the other party.” This could potentially be a tricky one in so many ways. What happens when one telco makes an agreement with a third party MVNO which then targets a user segment already guarded by the partner telco - just as a ‘for instance’? Proper or improper?

Many network sharing and other species of telco alliance have foundered over this sort of problem and there are often rumours that the individuals at various layers in a network sharing partnership are falling out over a range of issues. 

That, admittedly, is a wild generalisation gleaned from experience in Europe. Perhaps the way carrier relationships are conducted in China, which in many ways is an oligopoly with government oversight, means there is a greater chance of keeping arrangements like network sharing on the straight and narrow.

Dividing up the coverage areas

The mechanism for deciding which player gets network responsibility for which regions is fairly straight-forward.

The companies say both parties will delineate and designate districts in 15 cities for each party to build 5G network infrastructure

In the five northern cities - Beijing, Tianjin, Zhengzhou, Qingdao and Shijiazhuang - the ratio of construction districts of China Unicom to China Telecom will be 6:4 while in the 10 Southern cities - Shanghai, Chongqing, Guangzhou, Shenzhen, Hangzhou, Nanjing, Suzhou, Changsha, Wuhan and Chengdu - the ratio of construction districts of China Unicom to China Telecom will be 4:6. 

China Unicom will be solely responsible for the construction in nine prefecture-level cities in Guangdong province, 5 prefecture-level cities in Zhejiang province and 8 Northern provinces (Hebei, Henan, Heilongjiang, Jilin, Liaoning, Inner Mongolia, Shandong and Shanxi) other than the regions mentioned above. China Telecom will be solely responsible for the construction in 10 prefecture-level cities in Guangdong province, 5 prefecture-level cities in Zhejiang province and 17 Southern provinces other than the regions mentioned above.