China telecoms giants plan future collaboration
Issue Date: 2016-01-27

China Unicom and China Telecom will collaborate on a shared cellular service network and other efforts amid intense competition from top market player China Mobile, stirring speculation of a merger down the road.

The carriers are China's second- and third-largest communications companies. Their top managers gathered here Wednesday to sign a strategic partnership agreement targeting such core businesses as cellphone and high-speed-communications operations. The move is seen aimed at withstanding pressure from their larger competitor.

The partnership entails joint network construction and sharing of existing resources, aimed partly at advancing the fourth-generation Long-Term Evolution telecommunications standard in China. New handsets will be developed in line with the standard. The duo will also team up to provide international roaming and other services abroad.

China Unicom and China Telecom have lagged behind China Mobile in offering 4G service, letting the competitor dominate the market. Beijing is thought to be looking into a potential management integration between the smaller companies. The duo's chief executives traded positions in August.