[ET Net News Agency, 2 February 2018] All three Chinese telcos announced that a new
leasing agreement with China Tower had been reached. The pricing framework remains the
same. However, instead of the previous "cost" + 15%, the new lease term is "cost" +10%.
Moreover, if two operators share a tower, the lease rate discount will increase from 20%
to 30%; if all three operators share it, the discount will rise from 30% to 40%.
Jefferies Research estimated the new tower lease terms would increase 2018 earnings of
China Mobile (00941), China Telecom (00728) and China Unicom (00762) by 1.1%, 3.2% and
8.2%, respectively.
It rated Mobile "underperform", Telecom "hold", and Unicom "buy", with respective target
prices of HK$77.03, HK$3.95 and HK$27.94 (up from HK$71.95, HK$3.77, and HK$25.56). (KL)