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RealTime IT News

Equant Gets Foot Into China

Global IP provider Equant, a subsidiary of France Telecom, announced Wednesday the award of its second major Asian virtual private network (VPN) contract in a month.

Terms were unavailable from officials at press time, a contract that brings secure IP communications to all of China Netcom Corp. As part of the agreement, CNC will exclusively sell and co-brand Equant's service offering throughout 26 Chinese counties.

The dominant telco, a joint venture of the Chinese Academy of Sciences, the State Administration of Radio, Film, and Television, the Ministry of Railways, and the Shanghai municipal government, is expected to offer this business-class network to its corporate and government customers in the near future.

The agreement is an important first step for both companies.

Equant, a communications provider in worldwide competition with industry giants British Telecommunications, AT&T and WorldCom, has its foot in the door to one of the world's largest population centers. China, slow to embrace the Internet but making ground quickly, is notoriously famous for keeping its borders closed to capitalist ventures.

The contract, if successful, could be the first of many for Equant down the road at a time when many of its competitors are still trying to gain entry. It also gives the company time to catch up with AT&T, which has been inside the country for more than 15 years.

China, on the other hand, is looking for entry into the World Trade Organization and can hardly expect to gain credibility with the governing body by keeping national borders closed to competition. Communist leaders, once opposed to any outside influence, are opening up many of its industrial sectors to deregulation.

Leaders are also beefing up their networks for the expected communications boom expected to hit the country as it draws nearer to the 2008 Summer Olympics, which will be held in Beijing.

Wednesday's contract with CNC is the second in one month for Equant, which already has more than 100 customers throughout Asia, the Americas and Europe.

On Aug. 30, Equant penned a deal with auto parts manufacturer Yazaki Corp. in Japan to a similar deal.

The contracts are good news for the company, which has been beset by many of the same problems affecting telecommunications providers worldwide. In August, shortly after its acquisition of Global One, the company was forced to take a $40 million charge and reduce its work force by 3,000 employees from 13,300.