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China Netcom Enters into Alliance with Singtel
China Netcom Corp, an emerging basic telecom operator focusing on data transmission business, said Monday that it has stepped out of the country border via setting up strategic alliance with Singapore Telecom (Singtel).
The co-operation will require China Netcom to provide efficient and safe data transmission devices for Singapore companies which have subsidiaries or partners in China.
Singapore is one of the major regional trade partners of China. The multinationals, many of which have offices in both China and Singapore, also help tighten the communications between the two places.
Using the virtual private network provided by China Netcom, the data communication will be safer and cost-effective, according to China Netcom.
``The two telecom operators could enter each other's market via buying the other one's services, this could help enlarge the customer base and revenue of both sides,'' said Su Zhenguo, director of international business section of China Netcom.
Foreign telecom firms are still banned to directly enter the country's telecom market, according to related regulations.
Su said the two are in close discussions for further co-operation, but no details are available at present.
China Netcom is one of the seven licensed basic telecom operators in the country. Focusing in constructing broadband network, the company is expected to be a strong competitor of the dominating China Telecom in data transmission service.
Singtel, like most of the other telecom operators, eyes the Chinese market as a promising revenue pool in the near future.
The company previously planned to indirectly enter the mainland market via acquiring Hong Kong Telecom, the major operator in the special administration region. Although later defeated by the more aggressive Pacific Century Cyber Works, Singtel never forgot the Chinese market.
Among China's seven basic operators, which are China Telecom, China Mobile, China Unicom, China Netcom, ChinaSat, China Railcom and Jitong, China Netcom has relatively a smaller size but is very aggressive in looking for international partners.
The company closed its first round of private equity placement in February 2001, raising US$325 million from a group of high-profile international investors, including News Corp Digital Ventures, Goldman Sachs Private Equity, and other leading Hong Kong and Chinese financial institutions.
The company recently reported its result for the last financial year which ended by March 31 and said the revenue will have a 200 to 300 per cent growth in the new financial year.
``Data transmission will replace IP telephony to be major revenue pool of the firm as the data demands of major clients like Bank of China and China Mobile are growing rapidly,'' said Edward Tian, president of the firm.
According to a senior official with the company, China Netcom had signed a draft co-operation agreement with a major overseas telecom company. The deal will soon be launched and further upgrade China Netcom's competitive edge in the international market, according to the unnamed source.
Source: China Daily
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