Metro Civil Communication Business
Metro civil communication system mainly includes power distribution cabinets, uninterrupted power equipment, optical fiber data transfer equipment and other necessary components which provide the wireless communication transmission in the underground network. Civil communication system provides telecom operators with mobile signal coverage within station areas, enabling passengers to enjoy high-quality information service, satisfying their diverse needs for information and making their ride truly unimpeded. At present, all Beijing subway lines offer 2G and 3G coverage, with which passengers are able to make calls, surf the Internet, and send/receive multimedia content inside subway stations and during their rides. 4G network has been set up and will be available in every Beijing subway lines gradually, thus increasing the transfer speed and enhancing the compatibility of underground communication network.
The Group adopts the business model of leasing and licensing in providing metro civil communication services to three telcos that relied on our transmission system to offer their subscribers 2G, 3G and 4G network. With the advent of 4G era, the Group independently conducts negotiations over leasing contracts of 4G network transmission with three telcos, two of which has already reached agreements with us. Negotiation with China Telecom is still under progress. Such model shall expand the Group’s income scale obviously.
The Group has completed the acquisition of metro civil communication assets of 134 stations of 11 Beijing subway lines, of which 85 stations of 8 lines were obtained in Sept. 2014 and other 49 stations of 3 lines in April 2015. Moreover, on Sept. 26 2016, the Group announced to acquire metro civil communication assets of 41 stations in 4 lines of Beijing Subway from BII. After such acquisition, the Group will complete the acquisition of all civil communication transmission system assets of the Beijing Subway from BII；For the future lines of the civil communication transmission system of the Beijing Subway, the Group can carry out its own investment. The Group will be standing at a very favorable position when negotiating with the operators for resources utilization or joint venture in the future. The Group also began investment and construction of the civil communication transmission system of Phase II of the Changping Line of Beijing Subway at the end of 2015. The construction of the civil communication transmission systems of the 6 stations of the Changping Line has been completed and such systems have been in use since the beginning of 2016.