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AT&T, the largest telecoms firm in the United States, plans to open its first Internet Data Centre in Shanghai in the next few months with a local partner, a move that signals its increasing expansion in China.

 

AT&T Group President Forrest Miller said recent mergers with communications providers SBC Communications Corp and BellSouth have spurred the company to seek a stronger foothold in the nation.

 

"China has been a real focal point of our activities," Miller told China Daily.

 

"The merger between SBC and AT&T will deliver even greater strength and capability to our global operations and strategy, as it will provide greater access to capital for future investment and expansion."

 

SBC last November completed a US$16 billion acquisition of AT&T Corp. The new combined company last month announced yet another merger with BellSouth Corp in a deal valued at US$67 billion, pending US regulators' approval.

 

AT&T was the first foreign company allowed to provide telecommunications services in China by setting up a joint venture with Shanghai Telecom and Shanghai Information Investment.

 

The venture, called Unisiti, previously known as Shanghai Symphony Telecommunications Co, provides value-added services and managed services to multinationals and domestic enterprise markets.

 

So far it has signed more than 200 MNC (multinational corporation) customers including Sony, Omron and COSCO.

 

The firm partnered with China Telecom and China Netcom to extend its reach to more than 135 cities in China.

 

"The joint venture continues to provide AT&T with a key competitive differentiator in China," said Miller.

 

AT&T last year saw annual revenues in China, including Hong Kong and Taiwan, grow 11 percent year-on-year. Last year, the firm relocated its Greater China Group headquarters from Hong Kong to Shanghai to better serve local customers.

 

Cingular Wireless, the largest US mobile operator in which AT&T holds a 60 percent stake, may also seek business opportunities in China in the future.

 

"We certainly intend to leverage the Cingular asset to serve our global enterprise customers. How and when that will happen is yet to be determined."

 

Major overseas telecoms operators such as Telefonica, Telstra, SK and PCCW have been seeking expansion in China's booming telecoms sector due to a market deregulation after the country's accession to the World Trade Organization.

 

By February, China had 355 million fixed-line telephone subscribers and 404 million mobile phone users.

 

"We're excited about the business opportunities (in China)," said Miller.

 

"But we would like to see a more open competitive environment because we believe it would encourage further investment, innovation and improved services together with more choice and better prices for customers."

 

The president urged Chinese regulators to embrace the opportunities brought by new technologies and services such as the IP (Internet Protocol) telephony.

 

IP telephony handles voice and data communications together on the same network and provides cheaper calls, which is posing a greater threat to traditional telephone operators.

 

Miller said IP telephony can help "stimulate the economy through competition, while benefiting businesses and consumers."

 

VoIP (Voice over IP) already accounts for 45 percent of long-distance calls in China, said Li Ping, vice-president of China Telecom Corp, at a technology summit last December.

 

"While China is making noteworthy progress in opening markets since its WTO accession, there have been restrictive shifts as well, such as the licensing reclassification of International IP-VPN (IP-virtual private network) services from a value-added service to a basic service," said Miller.

 

Compared to the basic telecoms service, the value-added service is less regulated.

 

The Ministry of Information Industry (MII) has approved VoIP trials by China Telecom and China Netcom in some cities.

 

But the regulators are trying to block IP telephony in the country, according to some media reports.

 

"As IP technology and convergence trends have rolled through whole industries, they have presented new global opportunities for businesses, at the same time challenging traditional business models and assumptions," said Miller.

 

(China Daily April 7, 2006)