China Unicom to branch out beyond border
Author: (HOU MINGJUAN)
March 12,2002
China Unicom is planning to acquire overseas telecoms operators, the company executives told Business Weekly.
"China Unicom will expand its operational capabilities in the international capital market and may launch merger and acquisition with reasonable prices," said Wang Jianzhou, the company president.
China Unicom will move one step further to maturity this year with revenue for the first time surpassing investment, Wang said.
Co-operation with overseas telecoms operators will help China Unicom reach beyond the country's borders, he said.
Among China's six basic telecoms operators, China Unicom is the first one to say it might acquire overseas counterparts.
"Acquisitions with overseas telecoms carriers will enable China Unicom to have precious footholds in the international telecom market," Wang said.
He said China Unicom will not only be a telecoms operator but will learn to be a good player in the international capital market.
Many overseas listed companies, including China Unicom, China Mobile and Sinopec, have suffered a lot due to a lack of experience in capital operation, industry experts said.
China Unicom will employ a group of financial experts before they take the initiative in the capital market.
The company is also considering setting up joint ventures with foreign counterparts in telecoms operation and technology development, Wang said.
"With setting up joint ventures, China Unicom will learn management experience from leading carriers," Wang said.
Value-added businesses will be the starting points, he said, now that China has entered the World Trade Organization (WTO), overseas companies will be granted rights for such businesses in China.
Value-added telecoms businesses, in contrast to the basic telecoms business, refers to the derivative services including Internet service, e-mail, call centres and tele-conference.
Setting up joint ventures in value-added businesses will also be a good choice for overseas carriers to avoid risks, industry insiders said.
As China has become the most rapidly growing telecoms market, many overseas investors have shown keen interest but are hesitating.
Investment in the rapidly growing carriers might be a good choice.
Vodafone, the leading telecoms carrier in Europe, had acquired 2 per cent of shares of China Mobile Hong Kong, the listed leg of China Mobile.
Vodafone said it is considering expanding the investment as China has become the most promising market.
There might be this kind of investment for China Unicom too as the company becomes more open to the outside world.
As the country's second biggest mobile carrier, China Unicom is taking better shape than most of the telecoms operators.
Credit Swiss First Boston said in its latest report that it is upbeat on China Unicom rather than China Mobile.
As the latecomer into the market, China Unicom enjoys tariff reduction from the government's preferential policies. Having a smaller customer base than China Mobile, Unicom moves fast and is more pro for the mass customer market, the investment bank said.
In a recent company conference, China Unicom set its year revenue target at 52 billion yuan (US$6.3 billion), an increase of 40 per cent over the previous year.
The company will attract 20 million new mobile telecoms users with 13 million for the GSM (global system for mobile communications) and 7 million for the code division multiple access (CDMA) network.
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Unicom keen to tie knot with biggest IP-video network
Author: (JIANG CHEN)
March 12,2002
Communications equipment maker Polycom said last week it had been selected by China Unicom as a system provider for what will be the world's biggest Internet Protocol (IP) video communications network.
China Unicom this quarter will complete the purchase of US$3.35 million worth of video communications systems from Polycom to install in an IP-video network linking Hong Kong and more than 300 cities on the Chinese mainland.
The video network is based on IP technology, allowing video calls to be cost-effectively carried over the same fiber optic lines the company uses for its Internet services. The IP network consists of seven major hubs and 23 minor hubs and is scalable up to 100,000 users.
An initial contract for the systems was signed in the fourth quarter of 2001, and a second contract was signed this quarter in addition to the contractual purchase of other equipment and software, Polycom said.
In addition to IP-video service, China Unicom will use its network to provide broadband multimedia services, according to the company.
"The new video communications system is the new service coming after the VoIP, Internet and frame relay services. It is based on our unified data network platform," said Liu Junjie, vice-president of China Unicom.
"The new system will provide users with easy-to-access, easy-to-use and cost-effective telephone conferencing and desktop video communications services, as well as multimedia applications in areas such as distance learning and remote diagnoses whereby residents living in remote areas have access to medical diagnoses through communications systems.
Through the co-operation with operators outside China, China Unicom will extend its business to other countries, Liu said.
As the only integrated telecommunications business operator in China, China Unicom has been the industry leader in constructing new networks for enterprises throughout the Chinese mainland.
The company has completed the construction of the second largest broadband optical fibre transmission network in China, which serves as the common platform supporting the various networks of cellular communications, domestic and international long-distance, data, Internet and paging services.
Through stringent equipment and network testing, China Unicom chose Polycom's video communications solutions as the combined video communications system, mainly because of its strong capabilities in development, excellent equipment functions and performance, as well as comprehensive service networks, according to Liu.
Following China Unicom's construction of the world's largest VoIP communications network, it is currently building the world's largest business video communications network consisting of the latest technologies that will provide new opportunities for operators and system providers.
"Through this solution, China Unicom will have one of the most advanced video communications networks anywhere in the world, facilitating global video communications at the highest business quality," said Bob Hagerty, chairman and chief executive officer of Polycom.
Key to the operation of the new video communications network are 34 Polycom MGC-100(TM) multipoint control units (MCUs), which are used for securing directing video communications traffic between two or more endpoints on the network, and facilitating multi-network communications.
The MGC-100 also improves the quality of video communications through its Packet Commander Technology, which optimizes picture and audio quality.
China Unicom will also leverage the advanced gatekeeper functionality of Polycom's new Path Navigator (TM) call processing server, which intelligently routes calls over the network, provides capabilities to greatly simplify the management of video communications, and makes video systems simple to operate for end users.
Under the first phase of the project, China Unicom will also deploy 33 units of the Polycom ViewStation (R) FX, VS4000 (TM) and ViewStation 512 video-conferencing systems - one in each province.
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