China Telecom Industry in 2006

Copyed from CTTL.cn

　As time goes by unnoticeably, the year 2006 is already at the end. For the Chinese telecommunication industry, 2006 is a year permeated with achievements. In 2006, the Chinese telecommunication industry entered the new era of telecommunication. Why do we say that? In 2006, every Chinese telecommunication enterprise rogressed nicely in their strategic transition, which marked the division between traditional telecommunication and new telecommunication. New telecommunication covers more areas, has longer industrial chains, and operates quite differently. With the increase in industry value, changes in the market, pularization of mobile telecommunication, promotion of the "rural project", and a deeper understanding the consumers have regarding telecommunication, the two main themes of telecommunication in 2006 are harmonious development and reform. Overall, 2006 is a year when Chinese telecommunication industry experienced fast growth.

　　Enhancemen to fover all strength

　　Compared with the tame Western telecommunication industry, the Chinese telecommunication industry maintained its high growth rate, mainly benefiting from the rapid growth of the national economy, the implementation of the strategy to use information to bring about industrialization, as well as a series of stable and practical developmental policies published by the telecommunication industry. Also, the various operators, besides going forward with their internal reform, the changing of their operating model, and the improvement of their service quality, have also increased the effort in market expansion, developing of the market potential, and the innovating of the operation model, which has increased the market demand.

　　The new eststatistics of the Ministry of Information Industry shows that in the first three quarters of this year Chinese telecommunication industry has continued to develop at a rapid rate. From January to September, the total national communication turnover was 1, 113.11 billion Yuan, an increase of 25.1% compared with the same period last year. Of the total turnover, 1,058.92 billion Yuan came from telecommunication operations, an increase of 25.5%. The national communication income was 527.85 billion Yuan, an increase of 11.7% compared to the same period last year. Of the total revenue, 479.93 billion Yuan came from telecommunication operations, an increase of 11.3%. The rate of increase in communication operation turnover is rough 2.2 times that of the communication operation income. In a year when the global telecommunication industry experienced lackluster growth, the Chinese telecommunication industry continues to increase stably, which shows the vitality of the industry as well as the positive effect the governmental policies are having.

　　In the last decade or so, the number of Chinese telephone users has ncreased in a "rolling snowball" fashion. Even though in recent years the rate of increase in operation income has slowed down, the number of users, and in particular the number of mobile users, has continued to grow at a rapid rate. From January to September of this year, 18.861 million more new fixed elephone users were added around the country, making the total 369.306 million. The number of urban telephone users increased by 13.594 million for a total of 253.346 million users; the number of rural telephone users ncreased by 5.267 million for a total of 115.96 million users. The number of wireless users in the city increased by 8.034 million for total of 93.334 million users, accounting for 25.3% of fixed telephone users. The number of national mobile telephone users increased by 49.748 million for a total of 443.154 million. The number of mobile group data users increased by 46.402 million for a total of 117.207 million. The ratio of mobile group data users among all mobile telephone users increased from the 18.0% measured during the end of last year to 26.4%. The increase in the number of telephone users in China has built solid foundations for sustainable growth in the telecommunication industry; it will further increase the social telecommunication consumption and help enhance the overall competitiveness of the Chinese telecommunication industry.

　　Harmonious development in the market

　　From January to September of this year, the total investment made in fixed assets for national communication industry was 144.31 billion Yuan, an increase of 17.7% compared to the same period last year; of the total investment, 142.48 billion Yuan were made on fixed asset for the telecommunication industry, an increase of 17.7% compared with the same period last year; 1.83 billion Yuan were invested in fixed postal assets, an increase of 21.5% compared with the same period last year. Many factors affected the changes in investment made in fixed assets for the national communication industry, which includes the adjustment made by enterprise in regard to their investment structure and investment direction. The increase in communication investment has helped the building of networks and the development of operations. Currently, with the operation income experiencing a slower rate of growth, an increase in investment made by telecommunication enterprise is merely a part of the market economy logic; it is a normal structural adjustment, and it demonstrates the practicality and reasonableness in corporate operation and investment.
　　Form Jannary to September, the Chinese mobile telecommunication income rose by 18.3% compared to same period last year, accounting for 47.1% of total communication incomes and further propelled the growth of telecommunication operation incomes. Data shows that the communication income rose by 22.2% compared with the same period last year, which is roughly twice as much as the rate of increase for major communication incomes. The ratio of fixed local telephone income and long distance telephone income in the total operation income decreased by 2.49% and 1.06% respectively compared with the same period in 2005, while the ratio of mobile telecommunication income and data communication income rose by 2.89% and 0.71% comparatively. In the mobile telecommunication field, the mobile data services developed quickly and its income accounts for 21.0% of the total mobile telecommunication income. The usage rate of fixed local telephones decreased by 2.9% compared with the same period last year, while mobile local telephone usage increased by 33.6% comparatively, further replacing fixed local services. Among fixed local telephone usages, the ratio of wireless telephone usage in the city rose from 24.9% last year to 25.7%, while the rate of increase fall from 25.3% last year to 0.2%, which shows its role in propelling the usage of fixed local telephones is decreasing. From the statistics, the change in the competitive structure and the improvement of operation organization has allowed the users to freely choose services and operators, and that has allowed for better satisfaction of the users' telecommunication demand and has promoted for more effective competition; this shows that the Chinese telecommunication market is becoming more civilized, which will allow the Chinese telecommunication market to become more harmonious.

　　Froms mall growth to quantum leap

　　The rapid growth of the Chinese telecommunication industry did not come from "luck"; it is achieved from the blood, toil and sweat, one step at a time. In the very beginning, the Chinese telecommunication industry lacked capital, technology, and management experiences, but the policies and state plans helped the telecommunication industry in getting the necessary fund as well as obtained the needed room for growth. In 2005, the Chinese telecommunication industry, under the guidance of the state policy, has achieved the metamorphosis of going from small growth to quantum leap.

　　Currently,Chinesepublicfixed telecommunication network and the public mobile telecommunication network have both become the biggest in the world, and they have maintained their rapid rate of growth. At the same time, Chinese telecommunication enterprise have progressed greatly in their effort to enter the world market, they can be seen everywhere around the world. Local equipment manufacturers such as Huawei and ZTE, after 10 years effort of internationalization, where they started in the surrounding market, moved to the developing countries, and are now permeating into developed countries, are now making more frequent appearances on the "short list" of global telecommunication giants. Furthermore, Chinese operators such as China Mobile are actively looking for opportunities to implement the "going out" strategy and become a player in the world stage. Many Chinese telecommunication enterprise are or are about to become "renowned world telecommunication enterprises".

　　China is displayingstrong potential in regard to future profit in telecommunication, development of future customers, future telecommunication investment, growth of the telecommunication market, development prospect of 4G, and overall investment environment, and it will sure propel the Chinese telecommunication industry into a quantum leap. 8

China Standard: should we support you?

11/8/2006, There are more and more Chinese technology standards becoming focus of our everyday chatting. From Chinese 3G standard TD-SCDMA to Chinese WiFi standard WAPI, From Chinese standard WiMAX McWill to Chinese IPTV standard AVS，each one brandished its Chinese flag to blandish Chinese goverment, Chinese media. Should we support all of them just because they are Chinese standard?

About one week ago, WiMAX forum chairman Ronald Resnick said in a summit in Beijing that China should be equel to each standard, only in this way Chinese products, Chinese standard can merge in to the world. Mr. Chairman is worrying about WiMAX will be replaced by Chinese McWill, but what he said is not only one-side opinion.

To have standard, to reap benefits, everyone knows the marketing rule. But this benefits should belong to all the people, all the cooperations, not only some standard publishing organizations.

Chinese have responsibilities to support Chinese standard, only when the standard will bring benefits to all Chinese, only when this standard can really become an international standard. Otherwise, standard can just be a new trade blockade.

Broadband service billing: based on traffic or time

11/6/2006, there is a long time dispute in China about the billing method on broadband service. Should it be based on how long you use it or should it be based on how much traffic you uesd? Recently, this dispute leads to a serious online brawl. The fuse of it is Nanjing telecom, China Telecom's branch in Nanjing city, suddenly announced that they would adopt traffic billing method on their broadband service instead of old time billing method.
Nanjing telecom stated that there was a big difference between different kind of broadband users. Averge monthly traffic is 8Gb, but some user can use upto 2600Gb per month mainly due to abuse of P2P software like BT. Nanjing Telecom considers such abuse of BT leads to unbalance of network resources, and it is unfair to those customers who don't use BT.
Sounds reasonable, right? But this annoucement reaps severe online remonstration. People threaten that they will change to other service provider who don't use traffic billing. People reprobate that this is a new monopoly policy. People rebuke Nanjing Telecom does not consider consumer benefits. Those who advocate the new policy often get flaks from raged customers.
Today, Nanjing Telecom told local media that their new billing policy has been temperately stopped, and no further information when they will resume this policy. Is this the victory of those critics? Mr. Xiang,ligang, Editor in Chief of a local communication magazine wrote in his blog:"This is a PR failure of China Telecom.". Xiang thought China Telecom should do more PR work before they launched this policy.
Nanjing Telecom doesn't think they are the first around the country to launch this policy. Some other cities in Jiangsu province also have this policy before them. Anyway, what we can find now is their reason to launch this new billing method doesn't disappear, they still fact hugh network resources unbalance. The traffic is increasing, but the revenue isn't. What is waiting them ahead is another suitable time to launch this billing method.
Maybe there is a good news for Nanjing Telecom, Chinese goverment is working on crumbling down those websites who provide piratic films downloading. If this work works, the pressure on China Telecom will be less.

China telecom industry's weird phenomena

 

8/24/2006，In an interview by Sohu.com, Senior engineer of policy and economics research institute in MII ,Dr. Zhu,jinzhou sum up four weird phenomena of China telecom industry.

No.1: Carriers always use "state-owned property assuring and increasing" to shield from offence.
No.2: Industry developing always sacrificed people's benifits
No.3: Domestic carriers' internet billing price is 7 times as international price
No.4: China's telecom bill is still in dystocia after 26 years.

Lucent China sues former supply chain GM

8/16/2006, Lucent China initiated court Proceeding with the case that they sue former supply chain GM, Mr. Chen,qixiong, to return 1.39million RMB personal incom tax yesterday in No.1 Middle court of SHanghai. Lucent China said in a statement they had paid more than 34 times income tax for Mr. Chen since Nov. 2005, but Mr. Chen never return any money to Lucent China.
Chen didnot appear on yesterday's court, his lawer said he didnot live in Shanghai, It was Lucent's mistake to sue him in Shanghai.He asked court to give him a 30days delay for him to prepare evidence.

Mr. Chen works for Philips China now.

Unicom's internet cafe chain running ground for unfair inter-carriers billing system

8/15/2006, According to local press, more than 2000 internet cafes belonging to China Unicom closed recently. The number amounts to 80% of the total number of Unicom's chain internet cafe. The closing of so many internet cafes means that the chian internet cafe strategy which China Unicom once expected high went bankrupt.
"It is unfair and high billing by fixed line carriers that lead to today's result." General manager of China Unicom's data and fixed line business, Mr. Zhu,shijun told the press. "We have to pay 2200RMB for each Mbps traffic to China Telecom, but we can only get 500RMB return from those franchised cafe owner. That means for each Mbps traffic, Unicom will have 1700RMB loss. Also, the price China telecom charge other customers is much lower than the price they give to us. "

China Unicom's internet cafe business began from summer of year 2004, they planned to build 2500 to 2800 franchised internet cafe around the country. Up to now, No formal feedback from China Telecom on this.

Another China Telecom/Unicom M&A rumour spreads

Another China Telecom/Unicom M&A rumour spreads
8/10/2006, Reported by Local press copied from Hongkong media, China Telecom will enter 3G mobile communication market though purchasing CDMA network from China Unicom. The news increases China Telecom's HK stock price by 4.56%. China Mobile, China Netcom and China Unicom's HK stock all increase at this news also.
The same as before, China Telecom, China Unicom, MII, SASAC(State-owned assets Supervision and Administration Commission) denied this news at once.
I donot remember how many times there is such news copied from HK media then spread through local media, some telecom analyst even think that such news is conceived by some Hongkong securities invsetors, because such news always can send those state-owned carriers' stock price higher.
Local analyst also point out that China Telecom donot have enough cash to make this purchasing.

Reasons that China Mobile renounced Millicom

Reasons that China Mobile renounced Millicom
8/8/2006， Reported by local press, In a board meeting in Beijing on July 2nd, directors of China Mobile vetoed the purchase of Millicom International Cellular S.A. ("Millicom")  finally on 5.3billion USD by China Mobile. Surprised by this result, and angried by new price talk suggested by China Mobile , Millicom then announced the end of M&A talk on the next day. Millicom announced to terminate all discussions concerning a potential sale of the entire share capital of the Company. And they pointed China Mobile would not be in a position within an acceptable timeframe to make a binding offer that was suitably attractive, given the current strong performance of the business, or sufficiently certain of closing.

About the reasons why China mobile renounced Millicom, the same article pointed out the field investigation to Millicom by China mobile was the main reason. In mid June, China Mobile send out a 15 experts group including lawer, banker and advisers, to all the countries Millisom provide service to made investigation. The group found they didnot understand Millicom at all, they even didnot know the basic information about Millicom。 Just after this investigation, China Mobile found maybe they choosed a wrong purchasing object. There will be great risks on operating in thouse countries Millicom provide services.

 

 

China Mobile will back to domestic stock market

AT&T coveting controling one mobile carrier in China
8/7/2006, President of great China area of AT&T, Mr. Li, Shengzhi told local press that AT&T will have interest on any oppunity in China telecom market.
He said:"After 22 years struggle in China market, China market has become one of the most important market on revenue increase in Asia Pacific market. In the first quarter of 2005, China market increased by 30%. Last year, AT&T also moved headquarter of great China division back to Shanghai from Hongkong. Now AT&T has more than 300 customers in China."

Li also said they would not be satisfied to just purchase some stock in second class market like Vodaphone, they want to  to be a controlling power in some Chinese mobile carrier.

China Mobile will back to domestic stock market
8/7/2006, "About go public in Domestic A stock market, We are now waiting for the approvement by CSRC(China Securites Regulatory Commission) ." One of a VP of China Mobile told local press. But he didnot say anything about the financial aim and when China Mobile can go public in A stock market.
Spokeman of China Mobile, Mr. Lei yu states that back to domestic market is a long-run process. But he denied to publish more information about this.
CEO of China mobile, Mr. Jianzhou Wang said in shareholder conference this may that he hopes China Mobile can go back to A stock market. Persons who are close to China Mobile think that no evidence show that this process can be launched right now, it need to wait CSRS's further suggestion.  

Huawei wins Netcom ASON trial

Huawei wins Netcom ASON trial
6/29/2006, Huawei today announced that they became the sole provider for ASON commercial trial of China Netcom's Longhual transmission network. Huawei won this bid after half year work with their full ASON solution and mature experience on ASON application. Huawei will provide Optix OSN series equipments to China Netcom.

Henan Mobile launch Mobile TV next month
6/28/2006, Xinhua news agency, Henan Mobile will launch mobile TV service from July 2006. Cooperated with Henan CATV, Henan Mobile's user can receive live TV services of all the Channels Henan CATV can provide now.

Wei of China Telecom appreciates IMS
6/29/2006, From IMS technology developement consulting meeting, Mr. Wei,leping, CTO of China telecom, said he thought IMS would have a good prospect. The reason is IMS not only got supprot from telecom industry, also got support from other industries, such as software, computer industry. 

China Mobile guarantees Tibet railway cellphone service

China Mobile guarantees Tibet railway cellphone service
6/27/2006, This saturday, Tiber railway(From Xining to Lasa) will begin to be in service. China Mobile today announced that they are the only mobile service provider that cover total tiber railway.
China Mobile said they could provide over 80% covering with their more than 200 base stations and repeaters. All viewing position will guarantee wireless covering.

Telefonica aiming to increase stake in China Netcom
6/27/2006, According to Hongkong media, Telefonica will increase another 5% stake of China Netcom to 10% by the end of this year. Telefonica will also get another boarding member position in China Netcom. A spokesman from China Netcom verified that they are in negotiation wiht Telefonica, but no further information.

Huawei and ZTE enter Nigeria mobile carrier
6/27/2006, From State media, Mr. Cornelius Adebayo, Minister of Federal communication ministry of Nigeria, said that Huawei and ZTE have interest to become the main share holder of two Nigeria service provider: Intercellular Nigeria and Cellcom.

Both carriers use CDMA1X technology. It was said Huawei will invest in Intercellular Nigeria, and ZTE will enter another one.

China may adopt one way cellphone charge

SDPC permits Putian/ Nokia Joint-venturing
6/26/2006, National Development and reform commisssion (www.SDPC.gov.cn) today agreed on the application that state-hold China Putian set up a joint-venture company with Nokia China. The new company will develope, manufacture and sell TD-SCDMA base station equipments. Annual capacity will be 10K TD-SCDMA base stations. 
China Putian will hold 51% stake of the joint-venture company, Nokia holds other 49%. The two paraent company will invest total 900million RMB on this project.

China may adopt one way cellphone charging
6/26/2006,State media reported, China goverment is discussing the possibility of a new communication billing policy, including long expected one way cellphone charging by Chinese consumers. But not affirmation is received from any department of China goverment.
The biggest problem behind one way charging in China is considered that it will deepen the unblance situation among different carriers. Telecom Analyst, Mr. Yu,zhangkun said that what one way charging means for China Mobile just like that monkey king does not have curse again. China Mobile will accquire more maketing share after this.
According to the data from MII, from year 2003 to 2005, China mobile's market share increased from 36.9% to 40.5%. China mobile is the only carriers whoese market share increases in China market.

Huawei Predicts 10.7 billion USD Sales For 2006

Primanex unveils high isolation isolators
6/23/2006,QINGDAO, CHINA �CPrimanex Corporation today announced specifications upgrade of one of its volume products �Coptical in-line isolators. To meet market demand and customers' needs, development engineers at Primanex have been working to improve Isolator's quality and to enhance their reliability. The most notable improvements in new SPECS are higher isolations over wider operating wavelength and temperature ranges.  

The new volume-produced optical in-line isolators can achieve isolation of >50dB for dual-stage and >24dB for single-stage over +/-20nm wavelength window and -5~700C temperature range; and for -20~700C temperature range within +/-15nm wavelength window, the isolators can guarantee isolation of >45dB for dual-stage and >23dB for single-stage. Please refer to Http://www.primanex.com for details.

Primanex can provide its customers with low cost and superior performance for various types of isolators, CWDMs, DWDMs and optical switches. Primanex proprietary optical devices, such as Ultra-fast magneto-optical switches, Etalon-based Athermal wavelength reference filters and Faraday-Rotating-Mirrors will add-in tremendous values for customers when more and more applications are discovered. Primanex owns more than 15,000 square feet clean-room for volume manufacturing and has hundreds of experienced skill workers.  Primanex can produce ten thousands pieces of devices per month. Through its innovations and manufacturing capacities built-up, Primanex is becoming a major supplier of optical components in the world.

Equity Firms Bid for PCCW, but China Netcom Opposes 
6/23/2006��HONG KONG -- Texas Pacific Group and Newbridge Capital Group (''TPG-Newbridge") confirm that they have submitted a proposal to acquire the telecommunications and media assets of PCCW Limited (''PCCW'') in a letter submitted to PCCW's Board of Directors earlier this week.

TPG-Newbridge initiated its formal expression of interest in PCCW earlier this year by entering into a scheme implementation agreement on January 26, 2006 to acquire 25% of the shares of Pacific Century Regional Developments Limited (''PCRD''), a Singapore-listed company which owns 23% of PCCW (equivalent to approximately 6% indirect ownership in PCCW). This scheme of arrangement was initiated after appropriate discussions with the Singapore regulatory authorities. The shareholder vote to consider the scheme of arrangement was scheduled for June 19, 2006, but was postponed in view of developments relating to PCCW. Subsequent to the postponement, PCCW received what was believed to be an offer from another party to acquire PCCW's telecommunications and media assets. In light of such events, TPG-Newbridge has submitted its letter to PCCW with the objective of providing the Board with a constructive alternative to consider.

 
TPG-Newbridge's proposal is conditional on the support of the Board of Directors and the shareholders of PCCW. As stated in the letter, ''We recognize the responsibility and sensitivity that come with the ownership of such a significant and strategic asset and are prepared to work cooperatively with regulators and other shareholders to create a transaction that benefits and is acceptable to all parties.'' Furthermore, we note the public statement made earlier this week by China Network Communications Group Corporation, which is consistent with our desire to pursue a transaction in accordance with the interests of all parties.

In accordance with the requirements of the Singapore Code on Takeovers and Mergers, the directors of Newbridge Century Ltd., which is the special purpose vehicle formed by Newbridge for the purpose of acquiring shares in PCRD, have taken care to ensure that the facts stated and opinions expressed in this document are fair and accurate and that no material facts have been omitted from this document, and they jointly and severally accept responsibility accordingly. As of the date of this release, the meeting of the scheme shareholders of PCRD has yet to be reconvened.

 

Above came from news releases from PCCW. But according to Hongkong media, China Netcom, who is the 2nd largest share holder of PCCW, has published announcement to oppose this bid. China netcom warned PCCW that telecommunication industry relate with national security, foreign companies shouldnot control PCCW, which is the no.1 fixed line carriers in Hongkong.

SK Telecom invests $1b in China Unicom 

6/20/2006, (Associated Press via NewsEdge) SK Telecom, South Korea's biggest wireless carrier by revenue, has agreed to buy $1 billion worth of convertible bonds issued by China Unicom, the listed arm of China's second most popular cell phone provider, as part of a strategic alliance, China Unicom said in a statement.

The two companies also have agreed to work together on their CDMA mobile phone businesses.

The bonds are convertible to 899.75 million shares, which represent about 7.15% of the issued and outstanding shares of China Unicom as of June 20 and about 6.67% of the enlarged issued and outstanding share capital of China Unicom, according to the statement.

Hong Kong-listed China Unicom expects the net proceeds of the bond issue to reach $997 million, which will be used for general corporate and working-capital purpose.

China Unicom said its alliance with SK Telecom will cover CDMA businesses including handsets, network, and value-added services for mobile phones.

China Unicom, which also operates a global system for mobile communications services, or GSM network, has seen its earnings hurt by a much weaker CDMA operation.

China Unicom's CDMA operation posted a pretax loss of 200 million Chinese yuan ($25 million) in 2005, down from 563 million yuan in 2004.

By contrast, its GSM operation's pretax profit rose 6.5 % to 7.28 billion yuan ($910 million) in 2005 from 6.83 billion yuan in 2004.

Merrill Lynch analyst Wendy Liu said in a research report that the deal is good for China Unicom.

"The Unicom management is keen to turn around Unicom ... Finding the right CDMA strategy has been a challenge. We think SK Telecom could be very helpful in this regard," Liu said.

Huawei Predicts 55% Regional Sales Growth For 2006
6/20/2006, Chinese supplier Huawei announced today that it expects contract sales in the Asia-Pacific region �C excluding China, Japan, South Korea and Hong Kong �C to reach US$2B during 2006. That's a 55 percent jump on last year's US$1.29B of contract sales in Asia (which was itself an 180 percent advance on the 2004 performance.)

Price still remains one of the key reasons why Huawei is expanding so fast outside China," says one financial analyst who wished to remain anonymous but works with the Chinese vendor. "Typically, it undercuts its western counterparts by as much as 20 percent. This is not as high as it used to be as Western vendors themselves are lowering their production costs by manufacturing in China as well."

Huawei says it now has a sales presence in 13 countries across the Asian region with actual products deployed in 20 countries. Its product focus in Asia is next-generation networks for fixed and wireless carriers. Among its customers are TT&T in Thailand, TM & TIME in Malaysia, PTCL & Telips in Pakistan and JTB in Brunei. Huawei has already won four 3G contracts in the region: B-Mobile in Brunei, Celecom in Malaysia, NTS in Indonesia and Econet in Indonesia.

 

Also from Communication Asia, Mr. Liu,jiangfeng from Huawei told state press that Huawei's revenue growth will be 30%, reach 10.7billion USD this year. In year 2005, Huawei got a revenue growth of 42%.

China Mobile, China Unicom cut rates

China Mobile, China Unicom cut rates
6/14/2006, From June 9, China Mobile will adopt the same roaming rate for international and Hongkong, Macau, Taiwan users. This new rate will include 50% cut on calling in service, GPRS roaming service and **139 service. State press reported today. Take Germany as an example, new rate only cost soccer fans 14.99Yuan per minute if they call back to China from Germany. Befort this adjustment, the cost will be 18.15 Yuan per minute. During the world cup 2006 period, soccer fans can even enjoy lower rate.

Not only China Mobile, China Unicom also said they were considering price reduction. From an Unicom sponsered International carriers conference hold in Shanghai today, China Unicom were negotiating with those foreign carriers on roaming rate cutting.

China Telecom aiming at 7million new broadband subscribers this year

China Telecom aiming at 7million new broadband subscribers this year
6/13/2006, From the first quarter financial report, New broadband subscribers for China Telecom reached 2.14 million, and total broadband subscribers reached 23.16million.

Earlier this year, China Telecom has set up the 7 million target of new broadband subscribers. In order to finish this task, China Telecom has taken several method to speed up their broadband services. Faster internet is one of weapons on this.

China Telecom now has 75% of internet exporting bandwidth that China has. China Telecom's Exporting bandwidth now reach 2500Gpbs, backbone bandwidth now reaches 4000Gbps. On customer side, From this year, China Telecom has made big investment on ADSL network upgrading. After that, China Telecom's ADSL bandwidth will increase to 20-24Mbps per user. From next month, Some of Nanjing Telecom's customer can have this 20Mbps DSL service.

Chinese SMBs in Globalcomm2006

MII officer: China won't protect Wi-Fi spectrum
6/11/2006,"The spectrum for Wi-fi today is in fact for medical application, not for communication. " Vice director of radio management in MII, Mr. Feibo Xie told local press, "Wi-Fi is a indoor gadget developed by IEEE, the spectrum Wi-Fi uses is not communication spectrum, Chinese goverment will not provide protection for it".

After Chinese Wi-Fi security standard WAPI rejectd by ITU last month, Chinese officer always consider that is an unfairness to China. The recent announcement by Xie is also a kind of reflection of this emotion.



Chinese SMBs in Globalcomm2006
6/11/2006, Although Huawei, ZTE and UTStarcom didnot attend the Globalcomm2006 show, some small or medium sized companies in Mainland China and Taiwan exhibited their strong interests on North American market through the show. These companies include media converter/ swith manufacture, PON equipments manufacutre, OSP products manufactures, connector companies, VoIP products companies and power supply provider.

The No. 1 and No. 2 media conveter manufactures in Mainland China, Raisecom and Fiberhome network both attended the show. Raisecom also attened last year's supercomm. The revenue of the 2 companies reached 400million RMB and 200million RMB each, they have most of the market share in Chinese service provider market. Compared to them, Shenzhen XDK is a small company, but they arenot newcomer to US market. They have attended OFC several times. They are eager to develope overseas market.

The No. 1 OSP product company, Sun&Sea came to Globalcomm this time also. During the OFC show this March, their exhibition once made their competitors like ADC very unset. Mr. Wang,jingsheng, CEO of Sun&Sea, told me that they would use their own brand to develope US market, although it will need longer time.

Photon Broband, subsidary of Neophotonics China, brought their BPON ONU and OLT products to Globalcomm. They consider their cost advantage will attract customers. But, Mr. Wang,yong told me their interest is still domestic market, they hope to learn something from the show.

Pandatel, a traditional German media converter company, purchased by Shanghai-based dowslake several months ago, came to Globalcomm too. CEO, Dr. Dan Yang told me Pandatel was a great brand in European and China market, although they didnot do well in North America market. But that is advantage of Dowslake. After merge of the 2 companies, Dr. Yang has confidence on the future of the new company.

Not like above equipment manufactures, Some other Chinses exhibitors focusd on consumer products. A Shenzhen VoIP company exhibited kinds colourful lovely small VoIP gateways. Some Taiwan companies showed their WiFi cellphone, even one Taiwan company showed their Skype PBX and Skype Phonw. On wireless side, I also saw one Taiwan company exhibited kinds of WiFi signal extender products. A Taiwan company named PLANET showed their wireless mesh products.

It is not easy for Chinese companies to develope North market. Some Chinese exhibitors told me they were glad to see some visitors from south America and Europe during the show. But anyway, North market is still their focus. Asked about how to develope US market, all Chinese exhibitors told me they understood they need longer time, they need to pass lots of certification first, they need to find some good distributor, there is a long way before them. Somebody told me some e-commerce website like Global Resource and Alibaba.com can help them, but some just said only exhibition was helpful.

If you know somebody who have interests to distribute Chinese communication products in North or South America market, Pl. contact me.

Reasons of Huawei entering Harbour

Reasons of Huawei entering Harbour
6/9/2006, Below opinions come from all editors of China fiber optics online（http://www.c-fol.net/）

Huawei wants Harbour's team
Including CEO Yinan Li, many high ranked staffs of Harbour came from Huawei. They experienced very hard and very special excerices in these years in Harbour. At the same time, they are familliar with Huawei. They are just the guys what Huawei needs now. Especially Harbour's CEO Yinan Li, we guess there is a big possibility that he becomes Ren's successor.

Huawei wants to avoid stronger competitor
Last year, there was a rumor that Siemens would purchase Harbour, if then, mastering the channels of Hurbour, Siemens would become strong competitor of Huawei in domestic market. Now there is no such dangeours.

Huawei needs new culture
We noticed Huawei launched their new logo, and Ren wrote a series of articles talking Huawei's new culture. That means Huawei needs more friends,not more foes. Purchasing Harbour, such a long time competitor and former traitor, Huawei showed their kindness and determination to the world.

WRI developes 80X40G DWDM system
6/9/2006, Beijing, A news announcement meeting named Ultra-speed, Ultra-capacity, Ultra-long haul optical communication technology development was hold in Beijing yesterday. Wuhan Research Institute(WRI) announced in the meeting that their 863 project "3Tnet scaleable 80X40G DWDM transmission sysem engineering and experiment " jointed by China Telecom had passed the certification of Science and technology Ministry. The system supports 40million people communicating at the same time.

Vice Minister of MII, Mr. Lou,qinjian, Vice minister of Science and technology, Mr. Ma,songde, attended the meeting yesterday.

ZTE facing investigation in India

6/2/2006, Indian goverment has halted one expansion plan for ZTE in India recently. State press reported. For the same reason as Huawei faced last year, Indian goverment worried that the quick expansion of ZTE will hurt those local companies. Before this new policy, ZTE was considering build a new factory in India.

Huawei's workaholic died in his working
6/2/2006, a young Huawei engineer died in his 25 age yesterday, many people Huawei's enterprise culture should be reponsible for this partly. Since long time ago, Huawei's employees have a habit to bring their sleeping cushion to office and work there nearly 18 hours a day. Sleeping cushion has long been thought the symbol of Huawei's culture. The death of the young engineer give critics newest evidence to criticize Huawei's culture.

Fiber manufactures going out of mire

5/31/2006, According to the newest published 2005 Top 100 electronic manufactures list by MII, Fiber business increases by 31.2%, and cable business increases by 44%. Jiangsu Zhongtian also entered the top 10 profiter, ranked no. 6 with profit ratio 11.4%.
In year 2006, 3G and FTTH have lanunched in China, there is continuous need on fiber and cable product. If manufactures can invest more on R&D, so they can kick off traditional competition. State press reported.
In the last year, Leading fiber manufacture in China, YOFC's manufacturing capability has reached 15million KM fiber, acquiring 10% of market share around the world.
Top one cable manufacture, Hengtong succeeded in wining the bid of China Mobile and Shanghai Telecom. Especially, their cost control strategy begun to have good result.
Through cooperating with YOFC, Zhongtian's cable manufacturing capability increased from 1.4million KM to 1.85 million KM. They are also the No.1 special cable producer in China.
Futong group developed fiber pre-rod for FTTH application. Now they are one of the 2 companies responsible for fiber standard creating in ITU-T.
Yongding group's revenue in 2005 increased to 4.746 billion RMB, a 226million increase than year 2004.

China mobile coveting Indian Reliance

5/30/2006, Just after the bid on Millicom, China mobile will then investe Reliance, one of the largest carrier in India. State press reported today.
Last October, China Mobile successfully accquire Hongkong based Huarenwanzhong, this week, they will announce the 5.3billion USD purchase on Millicom. Besides this, China mobile already has a purchasing list aiming at developing market all around the world.
Although China Mobile's overseas expansion is considered good for Chines companies, but still some critics point out that that is abuse of national treasure, because China Mobile is a state-hold company.

China Unicom secretly testing Wimax
5/30/3006, "China Unicom will finish the WiMax testing within year. " Mr. Yaojin Liu, CTO of Shanghai Unicom, branch of China Unicom, said to state press.
China Unicom is now testing Wimax technology in Guangdong,Shanghai and Dalian. They aim the technology at wholesale customers, especially goverment and environment protection industry. Wimax will be a complementary technology to fiber access and 3G technology. Liu said.
The test is now based on 802.16e standard, several domestic and foreign companies provide the Wimax equipments.

France Telecom may consider Chinese 3G system

BEIJING -(Dow Jones)- France Telecom's research unit in Beijing said Friday it is assessing China's locally developed 3G standard, which its parent company may consider using in Europe at a later date.

China's Time Division Synchronous Code Division Multiple Access (TD-SCDMA) standard uses a different frequency spectrum for mobile-phone calls and data transfers than the other two 3G standards, W-CDMA and CDMA2000.

France Telecom R&D Beijing's public relations manager, Li Juan, said research center applied to join the TD-SCDMA Forum, a group that promotes technical exchanges on the Chinese standard, earlier this month.

That application was approved by the forum Thursday, said a spokeswoman at the TD-SCDMA group.

"There is a possibility we will consider using TD-SCDMA in Europe when the frequency spectrum for WCDMA in Europe runs out of capacity," said Li.

France Telecom's wireless division, Orange, holds the frequency spectrum in Europe that supports TD-SCDMA, she said.

China is testing TD-SCDMA networks in several cities nationwide. But there are still no commercial networks based on the standard, which China helped develop and also wants to export.

France Telecomis the first overseas telecommunications operator to join the forum. The forum's spokeswoman, Zhang Lulu, said that reflects growing foreign interest in TD-SCDMA.

France Telecom cooperates with China Telecom, China's largest fixed-line operator by number of subscribers, to jointly buy telecoms equipment. Orange is planning to open an office in Beijing in June that will help local telecoms-equipment makers tailor products for Orange.

ZTE cellphone handles quality scandal in Sudan
5/29/2006, Because of quality problem, Sudan Telecom is considering claim on huge amount compensation to ZTE, the ambitous Chinese communication equipment manufacture. State press reported today.
It was said CEO of Sudan Telecom was very angry toward ZTE, and asked to stop all contract negotiating with ZTE now. But a spokesman of ZTE denied such report, although he admitted there really happened cellphone problem in Sudan. ZTE has good relationship with Sudan telecom, ZTE will handle this carefully. The spokesman said.

China asking IEEE appoligize for WAPI

China asking IEEE appoligize for WAPI
5/28/2006,China Broadband wireless IP standard workgroup told media that they have appealed to ISO about the WAPI voting result. According to an anouncement to Xinhua News agency from this workgroup:" there are more than 49 items that IEEE violates basic rule of ISO, they have clear evidence on this, and this is rarely seen during the history of ISO. "
WAPI and IEEE 802.11i， complementary to the de facto standard on safe problem, 30 country members of ISO made a vote on March 7. WAPI won 8 supporting votes, and IEEE 802.11i won 24 votes.
In the announcement by China broadband wireless IP standard workgroup, they said:" IEEE continuously violateed basic rule of ISO, misleading many members make opponent vote. The voting is unfair, China cannot accept it."

See report on the same thing from US media

China has launched a case against American chipmaker Intel's near-monopoly on encryption standards for wireless local area network (WLAN) equipment, state press reported Monday. China has accused the makers of the technology developed by the chipmaking giant Intel of unethical behaviour and has asked the International Standards Organization (ISO) to review the case, Xinhua news reported. It says that the American Institute of Electrical and Electronics Engineers (IEEE), actual makers of the technology, broke ISO rules when its national bodies voted on new technology to mend security loopholes in the WLAN standard. China now wants the ISO to investigate the fast-track process to determine "whether the ethical and procedural rules and principles have indeed been violated and whether the ballots have been unfairly influenced by those ethical and procedural violations". China's WAPI and American IEEE applied to the ISO for a new international standard last October, but the Chinese technology's bid for approval was rejected in a ballot in March this year. "The serious violations are rare in ISO's standardization history," said the statement, adding that IEEE "unjustly" and "unfairly" violated ISO rules which misled many national bodies that voted on the new international standard. ISO will investigate the case, the report said. China has bristled at depending on proprietary foreign high technology and in 2003 tried to force multinationals wanting to sell wireless computer equipment to support its proprietary and secret encryption standard called WAPI. Beijing was forced to scrap its plans for the system when companies such as Intel threatened to stop selling their products in China, claiming they would have to give up intellectual property rights to Chinese companies.

Shanghai IPTV aiming 80K subscribers
5/27/2006, Mr. Huaiyu Li, CEO of Shanghai Media group subsidiary, Baishitong Inc. ,told local media that they would have 50K to 80K IPTV subscribers within the year. After september, they will advance the IPTV promotion in Shanghai area. Li said:"when subscribers exceeds 80K, we can say the operation enter a good state. As Now, Shanghai media group is still in the investing Phase. "

China Wimax Standard prepares for final checking
5/27/2006, China WiMax standard edited by China communication standardizing association (CCSA) is now prepared for the final checking by MII. This 802.16d based standard is drafted by ZTE, Shanghai Bell, Huawei, MII communication research institute and many other related organizations. Spokeman from CCSA said that China enterprises now have more core patents than in 2G/3G area.

China Launch satalite broadband access also

5/25/2006, AT&T launched their satalite broadband access service yesterday, China Satalite communication company today made the same annoucement. Through a new gateway in Beiijing, China Satalite communication, the only satalite carrier in China, can now provide integrated services including voice, high speed internet and video to Norhteast, Beijing and Tianjing area, middle China area. By October this year, two new gateway will in use in Shanghai and Guangzhou, by then China satalite can provide services around the nation.

MRV Purchases Chinese transceiver manufacture HG Genune

5/24/2006, Markerter from HG Genune told us they were now belong to Luminent OIC, the wholely owned transceiver subsidery of MRV group. Noam Lotan, CEO of MRV, and Mr. Ma, Xinqiang, Chairman of HG group, signed the agreement yesterday in Wuhan.

According to the news release provided on HG group website, MRV will invest 45million USD to purchase all shares of HG genune hold by HG group, about 95.71%. Also HG gourp will invest 5million USD　to accquire 15% of Luminent OIC shares. MRV promised they would acitvily to make Luminent OIC public. If they cannot make the IPO on time, they will provide 45million USD to buy back the shares.

HG genune is founded in year 2002, its revenue reached 15million USD last year, with about 450K USD net income. HG genune has one of the best manufacting and R&D facilities in fiberoptics industry around Asia region. It now has nearly 800 employees. Its products include kinds of transceivers and OSAs, chips.

--
Liu,Jacques
Editor in Chief of China fiber optics online (www.c-fol.net)
SKype:jacquesliu
English blog: http://chinafiberoptics.blogspot.com
Chines Blog: http://blog.sohu.com/members/telecom-next/

Chancellor Merkel helps Siemens win 1.4billion RMB contract

Chancellor Merkel helps Siemens win 1.4billion RMB contract
5/23/2006, During her first official visit to China, German Chancellor Angela Merkel help Siemens communication win multimillion dollar contract from China Mobile and China Unicom.

The contract from those 2 mobile carriers seems a good retort to the gossip that Siemens communication will be purchased by CHinese communication giant Huawei.

Merkel is accompanied by Economy Minister Michael Glos, Transport Minister Wolfgang Tiefensee and a delegation of 40 top managers from companies like Deutsche Bank, Allianz, SAP and Siemens.

Other important news today

PCCW cooperates with Murdoch on IPTV
The largest IPTV service provider in the world, PCCW in Hongkong today announced that they will cooperate with Meida Tycoon, Rupert Murdoch on IPTV service providing. PCCW introduced NowBroadband TV service from Septermber 2003. Now their subscribers have reached 500K. From septermber last year, Murdoch's company had provided 11 channels content to PCCW.

--
Liu,Jacques
Editor in Chief of China fiber optics online (www.c-fol.net)
SKype:jacquesliu
English blog: http://chinafiberoptics.blogspot.com
Chines Blog: http://blog.sohu.com/members/telecom-next/

China Media think UTStarcom has more opporunities to be delisted
5/19/2006, UTStarcom today announced that they received an additional notice from Nasdaq. In the news release, UTStarcom said that Nasdaq listing qualification panel had agreed that they could continue their listing on Nasdaq national market. They hoped they could fill the 10-Q form on June 1st. I cannot tell their is bigger opporunities be delisted from the news release. I just donot understand why so many Chinese media get their conclusion. Maybe UTStarcom doesnot have a good PR department.
Today's other news, First, Huawei introduced their Tbps GPON equipment during Hongkong Broadband forum. It is interesting Huawei announce this GPON product in an Asia forum, not in Chicago next month.
A gossip, Mr. Wang,jianzou, CEO of CHina mobile is said to be the new minister of MII(Ministry of Information Industry ). Of Course he denied. In China, there are always so many gossips,canards, rumors.

Telecom Price cut looms in China5/18/2006, May 17 is international telecom day. On this day, MII hold a seminar on the possible price cut of telecom service. Telecom Expert, Professof Lv, tingjie of BUPT pointed out that unbalanced marketing structure is the cause of high price in China. Take China Mobile as an example, they have big scale economy, their cost to increase one customer is much lower than their competitors. Each market extending strategy of China mobile will have big pressure on competitors. Also all telecom service providers are state-hold companies, there is no real competition in China. These days, Chinese media report the price cut action in Beijing market. Just because the goverment recognized that the telecom service price is too high, they push the carriers to do something on price cut. Experts also suggest goverment to let more civilians to attend the price making so that they can have active affect on carriers.
Fiberhome build FTTH in BELARUSThis is the first project Fiberhome wins in that country. The engineering include hundreds of OLTs and ONUs.
China Mobile will launch Google search on cellphoneThis reported by Wall Street Journal. But Wang,jianzou, CEO of CHina Mobile didnot tell the detailed date they will launch this service. Yesterday, China Mobile cooperated with RIM to launch the first blackberry service in mainland CHina.

Siemens signed to purchase Photonic bridge

/ Huawei to accaure Siemens communication?

5/16/2006, Shanghai, Siemens, Photonic Bridge today finally signed agreement, Siemens will invest millions of USD to accquire Photonic Bridge, which is a optical networking equipment developer and manufacture. Siemens didnot announce the detail of this deal. Photonic Bridge was founded in year 2000 by Lucent China veterans, they are the first to introduce Sycamore's advanced optical network products to China. But as the optical bubble burst, they found them in a difficult situation. The big competitors in China didnot want them survive, their business dwindled quickly. This situation changed until the year before last year, they became a Siemens OEM partner. According to Mr. Xu,jian, CEO of Photonic Bridges, their 2005 revenue reached 25million USD, 80-90% percent is for Siemens. Siemens China said they will not intervene the managment of Photonic Bridges now, and no layoff will happen in Photonic Bridge.Just one day before this purchasing agreement, Many medias in China is spreading a big news that Huawei will purchase Siemens Communcaiton business. Although both Huawei and Siemens China denied the news, Chinese medias still hope that will happen. They think the possilbe accquiring is suitable for Huawei, and the most important thing for Huawei is how to bring the siemens communication business back to profit. I donot believe the reality of such news, I am dumbfounded by the wideness and quickness of the spreading of this news. It originated from an article on a Chinese Newspaper, Just in oneday, everybody around the China knew this, It has to thanks to the Internet.

China Netcom appoints new CEO

5/16/2006,China Netcom today announced that Mr. Tian,suning will leave the CEO positon from May 17, Mr. Zuo,xunsheng will take his position. Tian will still be China Netcom's vice chairman. Zuo,xunsheng has nearly 30years experience in China communication industry. He once was the general manager of Shandong telecom. Tian,suning told the press that he believed Xunsheng will bring their business to a better position, realize their transform to broadband and multimedia service provider.

Nortel welcome Chinese supplier

5/16/2006, Ottwa, Nortel invited 12 CHinese component suppliers to attend a Chinese supplier seminar hold in Ottwa these days. WTD, Accelink, Fiberxon and Gigacom are 4 optical component companies among the 12 suppliers invited by Nortel.

Why is Lu, not Wu leave UTStarcom?

See below news release from UT, Everyone was talking about that Wu will leave UT, nobody noticed Lu, why the final result show such a inverse situation?
According to some Chinese media, From early this year, Lu came to China frequently, he also tried to let more Chinese employees to know him. Insiders say this is a sign that he will replace Wu.
It is funny that Lu not Wu stay in UT. But from my perspective, Wu is welcomed by media, by his employee, Wu has clear insight on UT's product line and market. I hope Wu can survive UT this time.


5/10/2006, ALAMEDA, Calif. -- UTStarcom, Inc. (Nasdaq: UTSI - message board), today announced that its Chairman and Chief Executive Officer, Hong Lu, notified the Board of Directors of his resignation. Mr. Lu will remain as Chairman and CEO of the company until December 31, 2006, focusing on the Company's strategic opportunities and assisting during the transition. Mr. Lu will remain as a strategic advisor to the company after his formal departure in December. Tom Toy, currently an independent director of UTStarcom, will assume the position of chairman of the board as of January 1, 2007.
"I believe that now is the right time for me to pass the company's leadership to a new management team who will take UTStarcom to the next stage," stated Hong Lu. "I have great confidence in the company's prospects and believe that its new leadership and employees will successfully carry the business forward."
Hong's vision drove the company's growth into a multi-billion dollar provider of IP-based telecom equipment, and become the leader in China's PAS market," stated Tom Toy. In addition, under Hong's leadership, UTStarcom has been successful in expanding the company's presence in such markets as Japan, India, Latin America, Europe and North America. We thank him for his tremendous contributions and tireless commitment to the company and wish him the very best in all his future endeavors."
"Hong has been great leader and a great friend and partner for the last 11 years," added Ying Wu. "I am confident that together we will make the transition smoothly and I truly believe that UTStarcom has a bright future with a great team of employees."
Ying Wu, CEO of China, will assume the CEO position as of January 1, 2007. Mr. Wu has been UTStarcom's Executive Vice-President and Vice Chairman of the Board of Directors since October 1995. Prior to its merger with Unitech Telecom, Inc., he was the President of Starcom, Inc. Before founding Starcom, Inc., Mr. Wu was a member of the technical staff of Bellcore (now Telcordia). From 1987 to 1988, Mr. Wu was a consultant to AT&T Bell Labs (now part of Lucent Technologies). He holds an M.S. in Electrical Engineering from the New Jersey Institute of Technology and a B.S. in Electrical Engineering from Beijing Industrial University.
UTStarcom also announced that it started a search for a Chief Operating Officer who will be responsible for overseeing UTStarcom's worldwide operations and supporting its infrastructure enhancement efforts. This position, based in California, will work closely with the CEO in executing on the Company's strategy.

Who will get China's frst mobile TV licence?
5/10/2006, Reported by First Financial Daily, China National Radio, China Raido International and another company belong to Beijing TV have made the application for first mobile TV license in China. But according to chief engineer of China National Radio, Mr. Qian,yuelin, SRAFT still didnot make any response to their application. But Qian is confident to accquire the license.

For the Mobile TV standard problem, It was said the DMB standard from Koear will become the winner from the competiton in MediaFlow from Qualcomm, DVB-H from Europe and the Japanese standard.

China Unicom confirm international cooperation on CDMA network
5/10/2006, Impact by the possible invsetment by KDDI, KT and Sprint, China Unicom's Hongkong stock price skyrocked to the two-years high position. It increased 7.5% to 7.0HKD this morning. Both KDDI, KT have denied the investment. One spokeman from KDDI said they would not make invesment, they only had interest on cooperating with Unicom on roaming and 3G technology. But Mr. Li, Gang, VP of China Unicom yesterday confirmed with a reporter that they do have some cooperation plan on CDMA network, investing to Unicom is only one of the cooperating way.

Guangdong Netcom purchase WiMAX equipment
5/9/2006, From Local newspaper, Guangdong Netcom has signed agreement with 2 WiMAX(802.16d) equipment suppliers to purchase their products. According to the full plan of Guangdong Netcom, the purchase will amount to 280million RMB. After Guangdong Netcom, Shanghai, Jiangsu and some other province also will follow their example. Guangdong Netcom will deploy these equipments to each city of the province. They will focous on low-end enterprise customer and high end personal customer using this technology. This is because China Netcom only has 10M Spectrum resource on 3.5GHz spectrum.

CCTV accquired 2nd IPTV License
5/9/2006, From The first financial daily, Spokeswoman of SARFT(The State Administration of Radio Film and Televison)，Hong Zhu confirmed with the press that CCTV had got the 2nd IPTV licence in CHina. This license was the same one with the first one issued to Shanghai Media Group.
According to other leader of SARFT, they still have no big plan on IPTV promotion in China. The 2 licenses issued only is a kind of experiment. They will keep the tight control on the IPTV developement in China.

China Telecom CN2 enter North America
HERNDON, Va. -- China Telecom USA today announced that its parent company, China Telecom, the largest fixed-line operator in China, is planning to launch the Next Generation Carrying Network CN2 in North America. CN2 is a new MPLS next generation IP platform for businesses, designed to support both voice and data services. The CN2 Network began rollout in China in mid-2005. CN2 has direct coverage across 194 cities in China with global PoPs planned for London, Frankfurt, Hong Kong, Singapore, San Jose, Los Angeles, New York and Washington, DC. CN2 is linked to ChinaNet's more than 35 million registered customers and will provide direct connections to all major global ISPs for direct traffic routing.
CN2 is a newly built, separate network designed to provide superior reliability and performance to support mission-critical and high-priority business applications. CN2 provides the following cost effective services:
High-performing global Virtual Private Networking Next generation networking (NGN) -- converged communications (voice, data and video services) Enable Future 3G mobile application communications across CN2 network backbone Centralized network management -- end-to-end real time network monitoring and customer network management Enhanced network performance in terms of latency, packet loss and availability Network-to-Network interface (NNI) to provide truly global MPLS VPN connectivity across other global networks. This new network, which is based upon MPLS technology, runs separate to the existing ChinaNet Network. CN2 has five levels of Quality of Service (QoS) management, VPN service management, traffic and performance analysis, and customer information distribution. "Both IP and MPLS can be used to create corporate VPNs. However, MPLS VPN is more dynamic, combining the intelligence of private IP routing with the added performance of label switching to move packets between any location in the network," commented Donald Tan, President of China Telecom USA. He continued, "CN2 also provides a greater degree of security for voice and other types of business traffic since the MPLS routing table is separate from the public Internet. Multinational companies that use CN2 will experience network performance enhancements, including network reliability, flexibility, simplicity and scalability, which are unmatched by the traditional Internet."