China is getting a fourth wireless provider — China Broadcasting Network (CBN) — which has been awarded spectrum by the Chinese government. CBN is a cable and broadcasting company that has been struggling, partly due to competition from the telcos who have been taking market share with fiber-to-the-home and IPTV.
CBN will enter the wireless market by partnering with China Mobile to co-build and share a 5G network under an 11-year agreement. The parties shall “carry out 5G co-construction and sharing as well as content and platform collaboration,” according to a China Mobile statement.
China Mobile currently holds a license for using the 2.6 GHz and 4.9 GHz frequency bands for 5G on a nationwide basis. CBN has authority to use the 700 MHz and 4.9 GHz frequency bands.
The parties shall jointly construct a 5G network in the 700MHz band. And before the 5G network in the 700 MHz frequency band becomes commercially available, CBN may share China Mobile’s 2G/4G/5G networks on a paid basis to provide services to its customers.
New Street Research analyst Chris Hoare said, “Entry of China Broadcasting Network in this way is a net negative for all Chinese mobile network operators in our view. Although we don’t at this stage envisage a major change in market dynamics post CBN launch, it likely adds incremental pressure to trends. Also, even if it takes time for a new entrant to develop its business and risks to materialize, we have seen in different markets that a new entrant is negative for incumbents'/challengers’ share prices.”
China Unicom and China Telecom are also involved in a 5G partnership to co-build new infrastructure.
When China Unicom and China Telecom announced their partnership last year, they said that jointly building a 5G network would result in huge cost savings. China Telecom is building 60% of the network and China Unicom is building 40%.