China’s independent tower industry reached a major milestone this summer through the creation of the China Independent Tower Alliance (CITA). Buoyed by a key government document released in the Spring and under the leadership of the Communications Network Operation and Maintenance Committee (COMC) of the China Association of Communication Enterprises (CACE), independent towercos of all sizes have banded together to create a unified voice. TowerXchange participated in the formation of CITA and is the first in English media to report exclusively on CITA details.
About CITA
The China Independent Tower Alliance (CITA) was inaugurated on 30 June, 2017, created under the leadership and guidance of the Communications Network Operation and Maintenance Committee (COMC) and in partnership with private towercos, telecom infrastructure builders, equipment and service providers, design consulting firms, academic and research institutes, and more. Its current membership consists of more than 60+ organisations.
Membership is voluntary and requires a written application. The applying firm needs to have a “certain degree of advancement, influence, and significance” within the industry and receive the vote of two-thirds of the Alliance council for successful admission.
How CITA came together
As TowerXchange previously reported back in early December 2016, China’s independent towercos were starting to feel the squeeze as State-owned China Tower Corporation (CTC) began to make its presence felt. Market dynamics were such that the 200+ players felt they were in a grey space where their existence may not be supported nor permitted.
Enough concern was voiced that a consultation meeting was arranged between independent towercos and representatives from the Ministry of Industry and Information Technology (MIIT). The conversations and feedback from this November meeting led to a spirit- and moral-lifting government document No. 92 clarifying and effectively legitimising the role of independent towercos.
From there, momentum gathered and the industry quickly rallied together for further discussions that led to the eventual formation of the industry body to serve the interests of the independent tower sector.
The Alliance seeks to support the development of an innovative and sustainable independent tower sector that exists to serve market needs; whereby members abide by the principles of industry development, equality, mutual benefit, risk and resource sharing, and synergy.
CITA will be driving government relations; telecom infrastructure standardisation and professionalisation; land and resource optimisation; industry networking and information exchange; and MNO communications. It endeavours to create an open, transparent and fair competitive and policy environment that allows all industry stakeholders to achieve common goals.
CITA formation timeline
CITA’s main roles
1) To be a strategic advisor and supporter to key government departments, acting as a bridge to introduce and communicate industry related policies, law and regulations and to support their execution, assessment and feedback. To voice the wishes and concerns of Alliance members to government, with the goal to seek resolutions supporting industry development.
2) To develop a regular channel of communication between MNOs, China Tower Corporation, China Radio and Television and other telecommunications enterprises; to enhance Alliance members’ understanding of the above parties to promote win-win partnerships.
3) To build a platform for daily communications between members that encourages technological and business model innovation, resource and information sharing, and a fair and competitive market.
4) To carry out research and other activities to understand industry developments and identify solutions to pressing issues and their implementation.
5) To launch industry standards in technology, leasing and service provisions; to undertake research with the aim to develop self-regulation, professional development and industry standardisation.
6) To organise activities and events to facilitate member training on law, taxation, technology, safety, et cetera, as well as funding and financing services.
7) To grow both the influence and membership of the Alliance through a dedicated website and various mainstream media; to initiate positive Alliance and member publicity.
8) To capture and summarise member and industry data in a timely manner, in order to maximise the localisation of the Alliance, create a top-down organisational structure, and handle tasks assigned by various levels of government and the highest order of the Alliance.
9) To regularly hold meetings with government department leaders, telecom infrastructure enterprises and Alliance members to discuss industry developments, with the goal to seek increased policy support and effectively address roadblocks and challenges to industry growth.
CITA’s first Chairman and his vision
During the opening comments at CITA’s first event in August in Beijing, its Chairman Zhang Zhiyong (of Miteno, China’s second largest independent towerco) made some interesting points worth highlighting:
- Document No. 92 allowed independent towercos to progress from “outsiders” to real “participants” in the country’s “co-build, co-share” regime.
- Towercos are asset-heavy companies, and as result, independent towercos need to pay attention to their capital management.
- The growth of towercos naturally depends on funding and financing, and the appropriate support would allow companies to soar.
- Towercos need to increase awareness of optimal capital deployment and make it work to their advantage. For example, the Alliance could consider creating a fund together, to set up proper rules on accessing the fund, so members can support each other’s growth. Or could it be possible to partner in such a way that Alliance members could realise larger-scale financing. Or could a new model be created to allow a joint public listing.
What’s next
In the weeks following CITA’s first event, COMC-CACE lead for the Alliance Deng Jiatu and CITA’s Chairman Zhang Zhiyong paid visits to CTC, China Mobile, China Telecom and China Unicom, to both introduce CITA and pave the path for closer collaboration to all parties’ benefits.
Over the last few meetings, some members have expressed the need to include not only the MNOs as part of its activities and membership, but also CTC. And while the MNOs do work with the independent towercos, it remains to be seen how CTC at the highest level would view the suggestion of collaboration with other towercos.
China’s independent towerco industry is a mashup of companies with varying degrees of maturity, business savvy, scale, geographical coverage, financing and ambition. A good percentage of them are also not “pureplay” towercos; rather, they may have other primary business units in tower manufacturing, technology, or related products and services. As such, the “junior” towerco members certainly seek to benefit by listening to and tapping into the expertise of those who have come before them, while market leaders may benefit by imposing discipline and standards that ultimately serves all in the game.
While CITA’s website is still under construction, its WeChat group is alive and well, with 230+ people. Over the last few weeks, various industry articles, business opportunities and documents have been shared, with no doubt many more offline conversations. Discussions have also been initiated around intelligent locks for shelters, tower acquisition, site building best practices, policies, and regional RFPs. There is much more to come for CITA and TowerXchange is looking forward to welcoming a delegation to TowerXchange Meetup Asia 2017, as part of our continued efforts in exposing Alliance members to international best practices, new partners and investment opportunities in the region.
TowerXchange has participated in several of the formative meetings of CITA and looks forward to a long and fruitful partnership with the Alliance as we build to the launch of a TowerXchange Meetup in China.
About document No. 92
Perceived as a turning point for the independent towercos in China, the document was released by MIIT and SASAC following an industry consultation meeting. This provided a much needed boost to the towercos who were facing challenging market conditions, roadblocks to securing and executing BTS, questions on the legitimacy of their presence in the market place, as well as difficulties with contracts and account receivables.
Document No. 92 spelled out some key points, among them that independent towercos, along with CTC, were to be included and part of the system supporting the country’s “co-build, co-share” vision; that should CTC lack the capacity or be unable to deliver on tower builds as agreed, it would revert the order back to the MNOs in a timely manner; that should inappropriate and anti-competitive tactics be used and thereby create a monopolistic market place, MIIT would take action to address and set forth corrective action. The document also noted other opportunities such as DAS and street poles that towercos could explore, to provide additional services within the general “co-build, co-share” framework.
