BDA In The Press - Archive 1998

BDA In The Press 2000 + 1999 + 1998 + 1995-97

Financial Times - Telecoms Supplement
Wednesday 18 November 1998

"Flexing its new muscle, the ministry (of information industry) ordered in November that telecoms companies should "buy local" mobile telephony equipment where possible. The order coincided with the news that two leading local manufacturers, Huawei Technologies and Datang Telecom Technology, were soon to roll out mobile telephone systems developed in-house.

Though there remain several areas in which the leading four Chinese equipment manufacturers are technologically backward they do not yet make handset their competition has begun to erode the market share of foreign competitors such as Ericsson, Nokia, Alcatel, Nortel and Motorola.

The stakes are high. The mobile telephony equipment market, excluding handsets, accounts for about $7.5bn annually, according to official statistics. There were about 20m subscribers in China in mid-1998 and the number was growing by almost 1m a month.

It was not clear if the "buy local" order meant that only equipment made by Chinese companies should be bought by China Telecom and Unicom, or if products made in China by foreign investors also counted as "local". Consultants said it was likely that the distinction was left purposely vague.

"There will be a clear preference where possible to buy from the emerging domestic champions," says Duncan Clark, founding partner of BDA China, a telecoms consultants in Beijing.

Financial Times - Survey on China
Monday 16 November 1998

[...]

The underlying reasons for the move against foreign investors may have less to do with the law than with a sense that China's need for foreign capital and technology is waning.

"There is a growing feeling that China can go it alone in telecoms. Chinese banks have plenty of funds to lend to the telecoms sector. Overall, the market may be getting a little more protectionist," said Duncan Clark, managing director of BD Associates, a telecoms consultancy in China.

Mr Wu may have been convinced by the speed at which China's market is growing, and the success of China Telecom's various stock market listings, that the role of foreign companies may not be as crucial as previously thought.

New York Times
Monday 3 August 1998

Business/Financial Desk; Section D
Bringing China On Line (With Official Blessing)
By Mark Landler

"The Chinese Government recognizes that the Internet is a global thing," said Mr. [Peter] Yip, 43, the vice chairman of [China Internet Corporation], which is based in Hong Kong and backed by the official New China News Agency -- not to mention an impressive array of American technology companies. "That's why they've established a strategy and asked me to help them create a vehicle to allow people to participate." It is that kind of pronouncement that makes Mr. Yip's rivals seethe. They say China Internet, known as C.I.C., is only one of dozens of companies throughout the country that are racing to put China on line. In China, as in the United States, the Internet seems to be growing too rapidly -- and in too helter-skelter a way -- for any single company to mastermind its development. "Because the Internet has taken China by storm, there are very different proposals about how to develop it," said Don Xia, chief executive of Unicom Media, a Hong Kong company that is developing Internet services for China Unicom, one of the country's two main telephone companies. To Mr. Xia and others here, the debate is whether China's Internet should be open or closed; raw or edited, anarchic or controlled. Mr. Yip's company, they say, represents a more controlled, Government-directed approach. At the same time, hundreds of small-time entrepreneurs, most of whom lack China Internet's financial backing or political connections, are laboring to build a truly free Internet. "C.I.C. is out of step with what Internet users in China are about," said Duncan Clark, managing director of BD Associates, a telecommunications consulting firm in Beijing. "I think companies that make deals with them are actually doing themselves a disservice."

[...]

"The China Wide Web is an attempt to create a Web that is isolated from the Net," Mr. Clark of BD Associates said. "We're kind of past that already." Mr. Yip acknowledged that the China Wide Web's lack of an Internet connection was a weakness. But he said it was for financial, not political, reasons: the dominant phone company, China Telecom, had set access fees too high.

[...]

Financial Times
Wednesday 3 June 1998

"Chinese telecoms may open up soon" by James Kynge in Beijing

Chinese and foreign companies are hopeful that China's fixed-line telecommunications monopoly may come to an end next month, opening the way for limited competition with China Telecom, the dominant state company.

Chen Youde, deputy director of the international department of China Unicom, the state-run company which is set to compete with China Telecom in the fixed-line business, said that his company might be granted interconnection with China Telecom's network in the north-eastern city of Tianjin in July.

[...]

Duncan Clark, managing director of BD Associates, a telecoms consultancy in Beijing, said it was uncertain whether China Telecom would grant a full range of interconnection services.

"Whether there will be full interconnection locally, long distance, internationally, and for mobile telephones remains to be seen," he said.

The optimism for imminent interconnection derives partially from a recent ministerial merger between the MPT and the ministry of electronics industry, which was the controlling stakeholder in China Unicom.

Financial Times
Wednesday 22 April 1998

"China Telecom to buy 1.6% stake in Globalstar

China Telecom, the Hong Kong-listed arm of China's ministry of information industry, is to buy a 1.6 per cent stake in Globalstar Telecommunications, the US company building a world-wide satellite-based mobile telephone system.

Under the deal, China Telecom and ChinaSat, another subsidiary of the ministry, will retain the sole rights to provide Globalstar services in China. The holding will cost China Telecom $37.5m, the price of the stake at the start of negotiations two years ago and a significant discount on its current value of $120m.

The US tie-up comes ahead of China Telecom's expected acquisition of the cellular network in Jiangsu province, one of the mainland's biggest and currently owned by the ministry.

Globalstar said its tie-up would further its China ambitions. "The addition of China Telecom as a full partner solidifies satellite communications to China's 1.2bn people," said Bernard Schwartz, chairman and chief executive of Globalstar. Mr Schwartz is also head of Loral Space and Communications, Globalstar's largest equity owner.

Duncan Clark, managing director of BD Associates, a telecoms consultancy in Shanghai, said that China Telecom's stake in Globalstar was more likely to be a way of cementing ties with a global satellite company than an indication of a new strategic direction.

For Globalstar, the deal was crucial. Including China, Globalstar now has service provider agreements in more than 100 countries, covering 85 per cent of its business plan. The company expects to serve more than 200,000 subscribers in China by 2002."

South China Morning Post
Thursday 5 February 1998

China Telecom (Hong Kong) (CTHK) is in talks to buy the cellular phone assets of Jiangsu province for up to an estimated US$4 billion. [...] CTHK owns all the MPT's former mobile networks in Guangdong and Zhejiang provinces. [...]

After these two provinces, Jiangsu province has the largest number of subscribers on the mainland, with an estimated 850,000 customers, according to Beijing based telecoms consultancy BD Associates.

Managing director Duncan Clark said: "Given its strategic position and growth prospects, Jiangsu is a natural choice for injection into CTHK." [...]

"Jiangsu recently became the first province in China to buy a foreign billing system, showing it is clearly trying to take a lead," Mr Clark said.

Copyright © 1998-2000 BDA China Limited.

	Financial Times - Telecoms Supplement Wednesday 18 November 1998
			"Flexing its new muscle, the ministry (of information industry) ordered in November that telecoms companies should "buy local" mobile telephony equipment where possible. The order coincided with the news that two leading local manufacturers, Huawei Technologies and Datang Telecom Technology, were soon to roll out mobile telephone systems developed in-house. Though there remain several areas in which the leading four Chinese equipment manufacturers are technologically backward they do not yet make handset their competition has begun to erode the market share of foreign competitors such as Ericsson, Nokia, Alcatel, Nortel and Motorola. The stakes are high. The mobile telephony equipment market, excluding handsets, accounts for about $7.5bn annually, according to official statistics. There were about 20m subscribers in China in mid-1998 and the number was growing by almost 1m a month. It was not clear if the "buy local" order meant that only equipment made by Chinese companies should be bought by China Telecom and Unicom, or if products made in China by foreign investors also counted as "local". Consultants said it was likely that the distinction was left purposely vague. "There will be a clear preference where possible to buy from the emerging domestic champions," says Duncan Clark, founding partner of BDA China, a telecoms consultants in Beijing.

	Financial Times - Survey on China Monday 16 November 1998
			[...] The underlying reasons for the move against foreign investors may have less to do with the law than with a sense that China's need for foreign capital and technology is waning. "There is a growing feeling that China can go it alone in telecoms. Chinese banks have plenty of funds to lend to the telecoms sector. Overall, the market may be getting a little more protectionist," said Duncan Clark, managing director of BD Associates, a telecoms consultancy in China. Mr Wu may have been convinced by the speed at which China's market is growing, and the success of China Telecom's various stock market listings, that the role of foreign companies may not be as crucial as previously thought.

	New York Times Monday 3 August 1998
			Business/Financial Desk; Section D Bringing China On Line (With Official Blessing) By Mark Landler "The Chinese Government recognizes that the Internet is a global thing," said Mr. [Peter] Yip, 43, the vice chairman of [China Internet Corporation], which is based in Hong Kong and backed by the official New China News Agency -- not to mention an impressive array of American technology companies. "That's why they've established a strategy and asked me to help them create a vehicle to allow people to participate." It is that kind of pronouncement that makes Mr. Yip's rivals seethe. They say China Internet, known as C.I.C., is only one of dozens of companies throughout the country that are racing to put China on line. In China, as in the United States, the Internet seems to be growing too rapidly -- and in too helter-skelter a way -- for any single company to mastermind its development. "Because the Internet has taken China by storm, there are very different proposals about how to develop it," said Don Xia, chief executive of Unicom Media, a Hong Kong company that is developing Internet services for China Unicom, one of the country's two main telephone companies. To Mr. Xia and others here, the debate is whether China's Internet should be open or closed; raw or edited, anarchic or controlled. Mr. Yip's company, they say, represents a more controlled, Government-directed approach. At the same time, hundreds of small-time entrepreneurs, most of whom lack China Internet's financial backing or political connections, are laboring to build a truly free Internet. "C.I.C. is out of step with what Internet users in China are about," said Duncan Clark, managing director of BD Associates, a telecommunications consulting firm in Beijing. "I think companies that make deals with them are actually doing themselves a disservice." [...] "The China Wide Web is an attempt to create a Web that is isolated from the Net," Mr. Clark of BD Associates said. "We're kind of past that already." Mr. Yip acknowledged that the China Wide Web's lack of an Internet connection was a weakness. But he said it was for financial, not political, reasons: the dominant phone company, China Telecom, had set access fees too high. [...]

	Financial Times Wednesday 3 June 1998
			"Chinese telecoms may open up soon" by James Kynge in Beijing Chinese and foreign companies are hopeful that China's fixed-line telecommunications monopoly may come to an end next month, opening the way for limited competition with China Telecom, the dominant state company. Chen Youde, deputy director of the international department of China Unicom, the state-run company which is set to compete with China Telecom in the fixed-line business, said that his company might be granted interconnection with China Telecom's network in the north-eastern city of Tianjin in July. [...] Duncan Clark, managing director of BD Associates, a telecoms consultancy in Beijing, said it was uncertain whether China Telecom would grant a full range of interconnection services. "Whether there will be full interconnection locally, long distance, internationally, and for mobile telephones remains to be seen," he said. The optimism for imminent interconnection derives partially from a recent ministerial merger between the MPT and the ministry of electronics industry, which was the controlling stakeholder in China Unicom.

	Financial Times Wednesday 22 April 1998
			"China Telecom to buy 1.6% stake in Globalstar China Telecom, the Hong Kong-listed arm of China's ministry of information industry, is to buy a 1.6 per cent stake in Globalstar Telecommunications, the US company building a world-wide satellite-based mobile telephone system. Under the deal, China Telecom and ChinaSat, another subsidiary of the ministry, will retain the sole rights to provide Globalstar services in China. The holding will cost China Telecom $37.5m, the price of the stake at the start of negotiations two years ago and a significant discount on its current value of $120m. The US tie-up comes ahead of China Telecom's expected acquisition of the cellular network in Jiangsu province, one of the mainland's biggest and currently owned by the ministry. Globalstar said its tie-up would further its China ambitions. "The addition of China Telecom as a full partner solidifies satellite communications to China's 1.2bn people," said Bernard Schwartz, chairman and chief executive of Globalstar. Mr Schwartz is also head of Loral Space and Communications, Globalstar's largest equity owner. Duncan Clark, managing director of BD Associates, a telecoms consultancy in Shanghai, said that China Telecom's stake in Globalstar was more likely to be a way of cementing ties with a global satellite company than an indication of a new strategic direction. For Globalstar, the deal was crucial. Including China, Globalstar now has service provider agreements in more than 100 countries, covering 85 per cent of its business plan. The company expects to serve more than 200,000 subscribers in China by 2002."

	South China Morning Post Thursday 5 February 1998
			China Telecom (Hong Kong) (CTHK) is in talks to buy the cellular phone assets of Jiangsu province for up to an estimated US$4 billion. [...] CTHK owns all the MPT's former mobile networks in Guangdong and Zhejiang provinces. [...] After these two provinces, Jiangsu province has the largest number of subscribers on the mainland, with an estimated 850,000 customers, according to Beijing based telecoms consultancy BD Associates. Managing director Duncan Clark said: "Given its strategic position and growth prospects, Jiangsu is a natural choice for injection into CTHK." [...] "Jiangsu recently became the first province in China to buy a foreign billing system, showing it is clearly trying to take a lead," Mr Clark said.

			Copyright © 1998-2000 BDA China Limited.