China Broadcasting Network (CBN) has raised about $14.5 billion from various investors, and the new wireless entrant plans to use the funds as part of its 5G buildout.
The investors include Alibaba and the country’s utility company China State Grid. Each have taken a 9.88% stake. China Radio and Television Network owns a controlling 51% stake in CBN.
The Chinese news outlet DVBCN reports that “there are 47 promoters participating in the establishment of the National One Network joint-stock company.” The “47 promoters” is referring to investors, and the “National One Network” refers to the fact that China Broadcasting Network will be the only company in China to offer wired and wireless connections across the country.
Earlier this year CBN said it would enter the wireless market by partnering with China Mobile to co-build and share a 5G network under an 11-year agreement.
CBN has authority to use the 700 MHz and 4.9 GHz frequency bands. And China Mobile currently holds a license for using the 2.6 GHz and 4.9 GHz frequency bands for 5G on a nationwide basis.
The parties will jointly construct a 5G network in the 700 MHz 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.
The combined spectrum positions CBN well as it enters the mobile market in China as the fourth major player.
“CBN now has a strong balance sheet, large amounts of spectrum, backers with very deep pockets and a JV with the market leader China Mobile, which significantly reduces execution risk,” writes New Street Research analyst Chris Hoare. “It has been our view for some time that the market was being overly complacent on the potential threat from CBN. Our note on potential CBN disruption suggested total capex of $3.7 billion in the first 8 years, and $1.9 billion of peak funding. CBN looks to have raised $14.7 billion, which suggests the potential to be much more disruptive.”
The Chinese news outlet also reported that China's first batch of 5G full-band terminals supporting 700 MHz have been approved. The manufacturers receiving certification for their 5G equipment include Huawei, ZTE, Ericsson, vivo and Qualcomm.