CTC and Alibaba team up for cloud services

China Tower Corp, a mobile communication infrastructure company that runs almost all of the mainland's telecom towers, is in discussions with e-commerce heavyweight Alibaba Group Holding Ltd for cooperation in cloud computing, data intelligence and the internet of things, people familiar with the matter said.

The move came after Taobao China, a unit of Alibaba, agreed to buy about $100 million of equity worth as a cornerstone investor in China Tower's HK$68.1 billion ($8.7 billion) initial public offering.

The two sides will also seek cooperation in fifth-generation mobile communication technologies, self-driving and new-energy vehicles, said the sources.

"A deal is likely to be signed in several days," they added.

China Tower and Alibaba declined to comment.

Beijing-based China Tower is putting the final touches to its IPO in Hong Kong. With trading scheduled for Aug 8, it could become the biggest float globally in nearly four years since Alibaba's $25 billion New York listing.

The State-owned conglomerate plans to sell 43.1 billion shares at HK$1.26 to HK$1.58 apiece.

Established in 2014, China Tower handles the tower assets of the nation's top three telecom carriers－China Mobile, China Unicom and China Telecom, with the aim of reducing duplication of construction and expenditure.

So far, China Tower has around 1.88 million telecom towers across the nation, accounting for about 96.3 percent of all towers on the mainland. The company's assets are worth more than 320 billion yuan ($48 billion).

But the company is also scrambling to branch into new business areas. It is already gaining momentum by partnering with grid, transportation, energy, and other companies. Such cooperation is based on the fact that telecom towers can be shared by different industries because they have access to both wired and mobile networks and are linked to a steady power supply.

Fu Liang, an independent telecom analyst who has been following the sector for more than a decade, said it makes sense for a close partnership between Alibaba and China Tower.

"Partnering with China Tower will give Alibaba privileged access to its core information infrastructure resources, which can make its cloud computing service more flexible and responsive," Fu said.

"Also, China Tower can leverage Alibaba's edge in business operations to grow new businesses. That is of essential importance to China Tower, given its current businesses are overdependent on Big Three telecom carriers which are both its shareholders and customers," Fu added.