RealTime IT News

Cisco Secures China Carrier Contract

China Telecom has tapped Cisco as the primary equipment vendor of core and service routers for its new IP network.

The project, known as ChinaNet Next Carrying Network, or CN2, is ambitious. When completed, it will connect more than 200 cities and provide premium services to corporate customers nationwide. Financial terms of the deal weren't disclosed.

In addition, CN2 will interconnect with overseas points of presence , allowing for international Multiprotocol Label Switching-based virtual private network (VPN) services. Ultimately, China Telecom wants to become one of the world's largest providers of IP services within 20 years.

"We are very pleased to be continuing our excellent relationship with China Telecom and look forward to playing a part in the successful development of the CN2 network," Jia-Bin Duh, president of Cisco Systems China, said in a statement.

Cisco has been increasing its presence in China. In September, the company earmarked $32 million over the next five years for an R&D center in Shanghai, where engineers will focus on products for service providers. It will hire approximately 100 employees over the next 18 months.

The engineers will have plenty of opportunities to field-test equipment, because Chinese telecom carriers are rolling out wireline and wireless services at a rapid pace due to strong demand and a hot economy.

Scheduled to open next year, the new R&D center will help Cisco become more responsive to customers in China and elsewhere in Asia, the company said.

Other networking companies are also pushing into China, including Lucent , Nortel and Motorola .

In addition to a hot telecom market, these companies may further benefit from efforts to balance the U.S.-China trade deficit, which is tilted heavily toward China.