• December 4th, 2011
  • Dafiq Hussein

It has been reported this week that China Telecom Corp Ltd, one of China’s largest telecoms companies, is set to embark on a new venture with AT&T, in order to expand its market presence in the US and possibly other countries as well going forward.

AT&T have already been working in partnership with Chinese based telecoms companies since 2000, but with this new deal, China Telecom Corp Ltd will gain access to the AT&T network in the US, helping the expenditure continue on both sides of the globe.

Over the past decade, the Chinese telecoms industry has grown exponentially and corporations based in China are becoming more international, meaning the demand for cross country telecommunications is growing fast.

With this new deal, it will make it quicker and easier for companies in America to make calls to China and vice versa, as well as giving corporations more cross country services at a lower cost, such as managed hosting, telepresence and network integration services etc.

Speaking on the new business venture, Roman Pacewicz, AT&T Business Solutions senior vice president of marketing and global strategy, was quoted saying “When we talk to our customers, what they tell us is they want us to enable them to expand globally” he also added “As the world’s becoming more interconnected, they are relying on networks to connect different parts of their business”.

This new partnership is being undertaken with the aim of making it easier for cross country business between China and America. However, there is another underlying reason for China deciding to partner with AT&T as opposed to creating their own telecoms operator in the US.

According to the Financial Times piece on the new telecoms venture, there are concerns in the US that a Chinese built or owned telecoms company on American soil could make the country more vulnerable to spying and cyber attacks.

Because of these concerns, China Telecom Corp Ltd would likely face a lot of red tape and regulatory hurdles if they tried to setup their own base in the US, meaning it is much easier and quicker for them to join in partnership with AT&T instead, who already have vested interests in the Chinese telecoms market.