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.

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