Data services speak volumes for Netcom's biz
By Li Weitao (China Business Weekly)
Updated: 2004-06-29 14:28

China Netcom International Communications Co Ltd, a branch of fixed-line telephone giant China Netcom Group, believes international-related data services will be the major driver that will fuel its business growth.

The high-profile stake on data traffic is part of Netcom International's efforts to transform itself into a leading telecoms operator in Asia-Pacific.

"The data service promises huge potential to bolster our business growth," said a senior official with Netcom International,who asked not be named.

"We're foreseeing stellar growth of data business in the years to come."

Amid a company-wide reshuffle, China Netcom Group Corp last November launched Netcom International, which was designed to exclusively deal with international-related services.

A visitor to a recent telecoms show looks at solutions displayed at China Netcom's booth. China Netcom International Communications Co Ltd, a branch of China Netcom Group, is betting on data service to bolster its business growth.[China Business Weekly]

Citing research house Gartner, the official said the traditional international-related voice service is expected to grow 15 per cent annually in the next several years.

However, that increase will be a "natural growth," the official noted, and it will be limited.

The data services, in contrast, will see dramatic growth.

Gartner predicted the value of Asia-Pacific's data market will reach US$3.5 billion this year.

It will climb to US$3.8 billion next year, and hit US$4.3 billion and US$4.7 billion in 2006 and 2007 respectively.

Among the data services, traditional services such as IPLC (international private leased circuits) will post little, if any, growth in the coming years.

The ATM (asynchronous transfer mode) market will also grow -- slowly.

However, the managed data service, in which Netcom International has much strength, will post the fastest growth.

Managed IP-VPN (Internet protocol-virtual private network) is expected to become, by 2008, the second-largest revenue contributor for operators among the data services.

Currently, voice services account for the largest portion of most operators' revenues.

However, there is a heightened need for Netcom to shift its focus onto the data services to spur business growth, the official noted.

"We will try to maintain the growth of voice business, but data service is definitely the focus in the future," she said.

Netcom has billed itself as an operator with the greatest technical strength, largest pool of partners and widest service areas in China.

With an increasing number of multinationals establishing regional headquarters in China and domestic firms extending their global reach, "global collaboration" and "global management" have become an essential part of those corporations, the official said.

That has resulted in surging demand for international-related data services.

For example, big names such as Motorola, Carrefour and Haier need to know the finance, logistics and stockpile of their branches across the globe "in a rapid and accurate way."

Netcom International is striving to offer various data services to meet such demands, the official noted.

Netcom International aims to become, in the near future, the most preferred partner for global operators in China and Asia, in terms of both voice and data businesses.

It will seek growth areas in the trans-regional businesses.

Over the long term, by expanding its services and business scope, Netcom International aims to become a strong regional player - with a global brand -- in Asia.

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