To: Valueman who wrote (25633 ) 3/31/1999 12:57:00 PM From: Robert Sheldon Respond to of 152472
INTERVIEW-China Unicom to buy CDMA system This is not a total surprise as Sprint is an investor in Unicom. What is a surprise is T getting access in China at all. Most folks thought that Unicom would be the dominant player. Looks like there are a few party crashers out there. SHANGHAI, March 31 (Reuters) - AT&T signed on Wednesday a landmark accord to offer Internet-based telephone services in Shanghai in a deal that chips away at China's barriers to foreign telecommunications companies. AT&T signed a framework agreement to offer Internet protocol (IP) services in Shanghai's Pudong development zone in a venture with two Chinese partners, according to officials from the U.S. telecommunications giant and China. "We've agreed to organise a joint venture to deliver advanced value-added services in Pudong," said an AT&T official, who declined to be named. "This will include broad-band Internet protocol services." He said it would allow a "virtual private network" in Pudong, the city's premier development district. U.S. Secretary of Commerce William Daley, who is in China on an official visit, looked on as executives from the three partners signed the accord. "This agreement will enable for the first time a foreign partner to provide telecom services in China," the U.S. Department of Commerce said in a statement. Chinese officials described it as an experiment in allowing foreign investment in previously banned network operation. The accord comes as China pushes to enter the World Trade Organisation (WTO), and opening its market to foreign investors has been a key objective of the U.S. and other developed countries. China has so far barred foreign firms from offering telecommunications services, though some have gained roles as consultants or equipment vendors. "This agreement is a major breakthrough in China's telecommunications reforms," an executive of one of the Chinese partners said. The Shanghai Post & Telecommunications Administration and Shanghai Information Investment Inc join AT&T in the venture. No financial details were available and the proposed share of each partner was not given. Industry officials said IP telephone services, or the use of the Internet for telephone calls, were expected to be a key part of the venture eventually. China is already preparing to offer such services on a trial basis later this year, they said. The AT&T official said the company would first conduct a feasibility study and then negotiate a contract if the study proved successful. "We've agreed to do the feasibility study and we've agreed on certain principles," he said, but declined to give further details. The venture aimed to set up an IP service network, but the implementation of any project would require the approval of the government, the Chinese partners said in a statement. IP telephone services have aroused considerable debate within China. State telecommunications officials have already challenged one small domestic provider in court in a bid to protect their higher cost traditional telephone services. But China Telecom, the main telecommunications operator, has been looking closely at providing such services itself. Officials of the Ministry of Information Industry, which supervises the telecommunications sector, told Reuters, however, that IP telephone services were now seen as being open to some degree of competition.