British Telecom (BT) Group
Plc, one of the world's largest telecoms operators, expects its annual revenues
from China to hit 250m U.S. dollars within three years, a company executive said
yesterday.
Ben Verwaayen, chief executive officer of the BT behemoth, said that BT will
"generate a quarter of a billion dollars from China" within three years. BT now
generates annual direct revenue in tens of millions of dollars from China.
The group is optimistic about the Chinese market as demand for telecoms and
IT (information technology) services are surging in the country.
BT's business in China mainly focuses on serving business users, especially
multinationals' Chinese operations which need globally networked services such
as VPN (virtual private network).
For instance, "if Shanghai wants to become a truly global financial centre,
such as New York, London or Frankfurt, they (banks and financial institutions)
need a flexible and reliable network," said Verwaayen.
And an increasing number of multinationals are expanding their offices in
China, which could boost demand for the telecoms services BT can provide.
BT has partnered with China Netcom, one of the top four Chinese telecoms
operators, to provide MPLS, an important technology for fixed and mobile
services on a converged network.
Verwaayen revealed BT is planning to double its investment in China in the
future, but declined to give details. In 2005, BT invested more than 48m dollars
in rebuilding its networks in Asia-Pacific as part of its global next generation
network which could cost 20b dollars.
BT entered the Chinese market in 1995 and has established three offices in
Beijing and Shanghai, employing about 40 people.
China's telecom market has long been a tough nut for overseas operators to
crack. In 2000, U.S. operator AT&T launched Shanghai Symphony Telecom, a
joint venture with Shanghai Telecom and Shanghai Information Investment.
The performance of Symphony, now called Unisiti, has been largely
disappointing. Company executives have blamed it on regulatory limitations in
its business scope.
Verwaayen said he is seeing "very positive development" in China's telecoms
market after the country's accession to the World Trade Organization.
In the past few years, leading overseas operators Vodafone and Telefonica
have bought stakes in Hong Kong-listed China Mobile and China Netcom
respectively. In June, South Korea's SK Telecom (SKT) signed a deal with China
Unicom under which Unicom will issue 1b dollars in convertible bonds to SKT.
China Telecom is now the only telecoms operator which has yet to partner with
a foreign operator. Chairman Wang Xiaochu late last month said the firm was in
talks with five potential foreign investors. Verwaayen would not confirm whether
BT is one of the potential investors.
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