British Telecom (BT) -- one of the largest telecommunication operators in Europe -- is expected on Friday to become the first foreign company to enter China's telecom sector after the nation joined the World Trade Organization (WTO) in December.
BT is scheduled Friday afternoon to announce its cooperation with Chinese privately owned telecom service provider 21ViaNet (China) Inc.
Sources from both companies refused to tell whether there is any financial investment involved but said the cooperation will expand both companies' business coverage and is mutually beneficial.
According to the agreement, 21ViaNet will become the service arm for BT Ignite -- the broadband service branch of BT -- on the Chinese mainland, while 21ViaNet will adopt technology from BT Ignite to jointly develop new services.
BT's partner, 21ViaNet (China), is a leading value-added telecom provider which focuses on data services. With its headquarters in Beijing, the company controls 18 percent of the shares in the Internet Data Center (IDC), trailing the dominant China Telecom.
Humphrey Penney, director of BT Ignite Global Solutions, said the cooperation in the field of IDC and related services is the very beginning.
BT is looking for potential opportunities in China, Penney said, adding: "In the midst of the sluggish telecom market around the globe, we see the growth all across the board, ranging from the Internet, information technology and telecom sectors to traditional enterprises only here in China. China is the last land on earth for a new round of prosperity."
BT's involvement in China's telecom market will benefit both sides, industry experts commented.
For BT, suffering from the pressure of heavy debts, China may become its future revenue pool. For 21ViaNet, BT's reputation and customer base may help it move into the international market.
China vowed to gradually open its telecom market after accession to the WTO.
Value-added services in Beijing, Guangzhou and Shanghai are allowed to have up to 40 percent foreign ownership.
These services, in contrast to the basic telecom services -- including e-mail, on-line data searching, call center, Internet access and Internet content services -- are widely regarded by industry insiders as the first fields that foreigners may step into.
Value-added services have lower entry barriers and risks, said Zhang Xinzhu, a telecom expert with the Chinese Academy of Social Sciences.
He said, with China's outstanding performance in the telecom industry, more foreign telecom carriers may follow BT's lead.
Foreign telecom carriers could also test the water in the value-added business, and then develop into the basic telecom and other industries, he said.
(China Daily March 8, 2002)
