Update: China Telecom and China Unicom responded to the rumor of the two companies emerging into a mega-mobile carrier, saying they were not aware of the merger.
China Telecom Corp., Ltd. (CT) and China United Network Communications Group Co., Ltd. (China Unicom), two of China's largest mobile-phone carriers, will be merged into one mega-carrier to lead China towards dominating the world with its 5G technology.
The State Council, China's chief administrative authority which is led by Premier Li Keqiang, is reviewing the proposal to combine CT and China Unicom, both of which are state-owned enterprises (SOEs). The merger is apparently being driven by the need to have one mammoth firm, instead of two or more, aggressively lead the development of 5G in China. The resulting economies of scale should lead to better products and higher efficiencies.
Some observers believe the planned merger is also being driven by the intense competition between the United States and the worsening trade war between the U.S. and China, which is causing expenses to skyrocket.
5G is a next-generation high-speed wireless technology whose speeds are up to 100 times faster than the existing 4G service. The U.S. is the world leader in 5G technologies.
CT and China Unicom account for 19 percent and 20 percent, respectively, of the 1.49 billion mobile phone users in China. China Mobile, the only other mobile service provider, dominates with a 61 percent market share. Consolidation will leave only two firms:CT/China Unicom and China Mobile, which also an SOE.
CT/China Unicom and China Mobile will be allocated different spectrum so as to allow both firms to aggressively develop the 5G technology. Sources said CT/China Unicom and China Mobile will receive 100MHz of contiguous spectrum at 3.5GHz; 100MHz of contiguous spectrum at 4.9GHz and 50MHz of contiguous spectrum at 3.3GHz for indoor coverage.
Government regulators might also allocate 60MHz of contiguous spectrum at 2.6GHz to CT/China Unicom and 40MHz to China Mobile. The 40MHz will allow China Mobile to combine this with its existing 4G spectrum of 60MHz. China Mobile will, therefore, have a 100MHz spectrum at 2.6GHz to deploy, which is far larger than the 60MHz allocated to CT/China Unicom.
The United States is pulling out all the stops to ensure it leads the world in deploying 5G. The U.S. Federal Communications Commission reveals that U.S. 5G technology will be 100 times faster than 4G service.
The four major U.S. carriers have all announced 5G deployments. Verizon's 5G fixed wireless will launch in four U.S. cities; AT&T will begin its millimeter wave commercial deployments this year; Sprint will launch in the 2.5 GHz band while T-Mobile's 600 MHz 5G launch will take place in 30 cities.
