French phone giant picks China for Asian headquarters By JOE McDONALD
Associated Press Writer
SHANGHAI, China, Jan 17, 2000 (AP Worldstream via COMTEX) -- In a vote
of confidence in China's booming telecoms industry, French
equipment-maker Alcatel said Monday it will open an Asian headquarters
and major research center in Shanghai.
Alcatel considered Singapore, Hong Kong and Sydney but chose Shanghai
because of the Chinese market's explosive growth, said chairman Serge
Tchuruk.
The company said its regional headquarters will oversee an area
stretching from South Korea to Australia -- markets totaling 2 billion
people. The research center is to have 2,000 engineers working on
mobile phones and other technology.
''Alcatel is now betting considerably on China,'' Tchuruk said at a
news conference.
China's telecom market is expected to grow by 10 percent a year,
surpassing Japan by 2003 to become the region's biggest. Its fixed-line
network is already one of the world's biggest and most modern. The
number of Chinese mobile phone users is projected to grow from 40
million today to more than 115 million.
Foreign service providers are barred from China, but Chinese carriers
are big buyers of U.S., European and Japanese cable and equipment, much
of it made by joint ventures. Alcatel has 17 joint ventures in China
with a total of 5,000 employees -- 80 percent of them in Shanghai.
Demand for fiber-optic cable, switching equipment and other products
should grow even faster after China is admitted to the World Trade
Organization, Tchuruk said.
Alcatel, with 120,000 employees, is the world's biggest cable
manufacturer and makes mobile phones, switches and other telecom
equipment.
China already is trying to promote domestic competition by ending the
monopoly once enjoyed by China Telecom. And in a deal with the United
States last year, it promised to let foreigners own up to 49 percent of
Chinese telecom ventures once the country is admitted to the WTO.
Alcatel's announcement is a public-relations windfall for Shanghai in
the Asian rivalry for a leading role in promising Internet, telecoms
and other high-tech industries.
Drawn by its vast market and pool of engineering talent, a growing
group of global telecoms, computer and other technology companies
already have set up research centers in China.
Shanghai has labs run by Intel and United Technologies of the United
States, Siemens of Germany and Ericsson of Sweden. The city plans to
install a high-speed Internet network in hopes of attracting more
technology investment.
''It's becoming one of the key centers of China, and the most dynamic
city,'' Tchuruk said. ''We believe Shanghai is due to become a huge
pool of information-technology competency in years to come.''
Alcatel said its new Asian headquarters will bring together in Shanghai
top executives from across the region, including an Australian-based
Asia-Pacific chairman and a finance director in Indonesia. They will
oversee about 10,000 employees.
Tchuruk was upbeat about prospects for Asia-Pacific sales after three
years of crises. Interest rates have returned to normal and stock
markets are higher than their 1997 pre-crisis levels, he said.
''We are at the beginning of a virtuous cycle with big growth coming up,
'' he said.
Copyright 1999 Associated Press, All rights reserved.
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