China Telecom and China Unicom, the second- and third-largest operators in the country, are pooling their resources to jointly build and manage a 5G radio access network (RAN). The joint venture is aimed at cutting costs and will likely lead to fewer equipment orders and reduced revenue for homegrown infrastructure giant Huawei.

The agreement also calls for the sharing of spectrum, but each operator will build and manage its respective 5G core network. “[China Telecom] will cooperate with China Unicom to jointly co-build one 5G access network nationwide and co-share 5G spectrum resources while the 5G core network shall be respectively constructed by each party,” China Telecom wrote in a statement.

The scale of this agreement is significant, but not entirely new. The operators were already cooperating on 4G network construction throughout the country in a bid to compete with China Mobile, which commands a lion’s share of the country’s mobile connections.

China is undeniably late to 5G. Operators have said 5G services will reach 50 cities by year’s end, but the clock is ticking. The nation’s big three carriers began trialing 5G efforts in late 2018, and received long-awaited 5G licenses from China’s Ministry of Industry and Information Technology about three months ago.

China Unicom previously signaled its intent to be the first Chinese carrier to launch commercial 5G services, but plans appear to have stalled through the summer months. The two juggernauts plan to share responsibilities by slicing large cities up based on the existing footprint of each operators 4G LTE base stations.

“Both parties will delineate and designate districts each will be responsible to build in and the party responsible for the construction in a designated district will bear the relevant investment, maintenance, and network operating costs,” China Telecom said in a statement.

China Unicom will take on greater responsibility for building the 5G network in Beijing, Tianjin, Zhenghzhou, Qingdao, and Shijiazhuang. Meanwhile, China Telecom will take the lead in Shanghai, Chongqing, Guangzhou, Shenzhen, Hangzhou, Nanjing, Suzhou, Chansha, Wuhan, and Chengdu.

“[The operators] will be jointly responsible for ensuring the unification of network planning, construction, maintenance, and service standard in the co-built and co-shared districts, guaranteeing the same level of service standard,” China Telelcom said.

The collaborative sharing of networks and spectrum with third parties will also be designed in such a way so it does not “impair the interests” of either operator. The respective businesses and branding will remain independent and both operators agreed to cooperate for the benefit of their collective interests.

The operators said the 5G network co-build and co-share agreement will speed up the construction of a 5G network and lead to the faster deployment of service. The deal will also reduce network construction and maintenance costs by creating new efficiencies in operations and management.

China Telecom also said it will “fully leverage the comprehensive edges of cloud and network integration and the rich resources of government and enterprise customers.”