Chinese telecoms infrastructure firm China Tower says it has renewed multi-year framework deals with China Telecom and China Unicom to prepare for an expected surge in demand for IoT monitoring data and data analysis services related to its “Smart Tower” business segment.
According to a filing with the Hong Kong Exchange on Wednesday, China Tower said it signed separate agreements with China Telecom and China Unicom to lease transmission and cloud resources, including telecoms electricity cables, telecoms equipment, cloud private line and cloud equipment.
In both cases, the new frameworks are designed to help China Tower handle demand for “transmission of monitoring data and related data analysis services for mid and high-point IoT devices – including video cameras, weather, radar and other sensors – in its “Two Wings” business.
One of the “Two Wings” is China Tower’s Smart Tower business segment, which uses mid and high point “digital towers” equipped with IoT devices to collect data for government agencies to monitor things like water resources, transportation, environmental protection and emergency response. (The other “wing” is it energy business, which includes battery exchanges and power back-up services.)
Both framework deals – which are effective immediately and run to the end of 2026 – come with annual transaction caps. For the China Telecom framework, yearly transactions are capped at CNY150 million (US$20.9 million), CNY190 million and CNY230 million for 2024, 2025 and 2026, respectively. For Unicom, the caps are set at CNY120 million, CNY150 million and CNY180 million for the same period.
For comparison, China Tower paid China Telecom CNY84 million and Unicom CNY73 billion for leasing services in 2023.
In its H1 2024 financial results – which were also released on Wednesday – China Tower said its Smart Tower revenue grew 17.6% year-on-year to CNY3.9 million. Of that, 63% (CNY2.5 million) was generated from its tower monitoring business. China Tower’s energy business revenues grew 2.4% year on year to reach just over CNY2 million. Together, the “Two Wings” segment accounted for 12.4% of China Tower’s operating revenue in H1, an increase of 0.9% over the same period last year.
Meanwhile, China Tower reported an overall net profit of CNY5.33 billion for the first half, up 10.1% year on year, with a net profit margin of 11%. Operating revenue grew 3.8% to CNY48.24 billion.
China Tower also said it added 9,000 new sites in H1 2024, bringing its total tower count to just over 2 million. Total tower tenancies grew by 84,000 to 3.73 million.
According to government news agency Xinhua, citing the latest figures from China’s Ministry of Industry and Information Technology (MIIT), Chinese telcos installed 540,000 5G base stations in the first half of 2024, bringing the total number of 5G sites to 3.92 million. That figure accounts for a third of all base stations in the country, the report said.
China Tower was formed in 2014 to enable China Mobile, China Unicom and China Telecom to transfer their tower assets to a new company to reduce redundant construction of telecoms infrastructure. China Mobile currently holds the largest share at 27.9%, while Unicom holds 20.6% and China Telecom holds 20.5%. State-owned asset manager China Reform holds 4.4%, with the remaining shares held by the public.
