On 8 July, 2016, the world’s largest towerco, China Tower Corporation (CTC) finalised its leasing and pricing agreements with China Mobile, China Telecom, and China Unicom. The agreement outlined a pricing formula that offers deep discounts for co-locations. We dive into the details of the agreement plus offer a look at what the pricing formula means to the operators and the other independent towercos. (Yes, there are independent towercos in China!)
Lease agreement details
The terms of the lease agreement are for a five-year term covering:
1) Acquired towers
2) Newly constructed towers
3) Indoor distribution systems
4) Transmission products
5) Service products
Pricing formula
The pricing formula takes into account factors such as standardised construction costs, depreciation, maintenance expense, cost markup, and co-sharing discounts.
