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.

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