Briefing: China’s two major phone carriers discuss merger

1 min read

What a Mooted Chinese Wireless Mega-Merger Means for the 5G Race —Bloomberg

What happened: Two of the top three major telecommunications carriers in China are discussing a merger. A combination of state-run China Unicom and China Telecom would create a company with more than 590 million mobile phone subscribers making it the world’s second-largest wireless operator after China Mobile.

Why it’s important: The reason behind the incentive is not just the numbers, it is 5G technology. Thanks to government policy, China is slightly ahead of developed nations like US, South Korea, and Japan in 5G. Trials have started in 13 cities and the country is aiming at commercial application by 2020, but has yet to allot 5G commercial licenses or spectrum. Although no confirmation has been given, the Chinese government has been considering the merger for years. Escalating tensions with the US might expedite the deal.