Making a connection in the UK

Ou Yan, managing director of China Telecom Europe, says the company targets niche opportunities in the European market. [Zhang Chunyan / China Daily]

In times of need, China Telecom was there, which helped it establish a link to European customers

Six years ago, when China Telecom Corp first embarked on its European expansion with a team of four, Europe's telecom giants didn't realize that one day they would be working in close partnership.

But today's China Telecom Europe (CTE) is a partner of many leading network operators and service providers including British Telecom, Telecom Italia and Telefonica.

"We look for niche opportunities in the market and differentiate our services," says Ou Yan, managing director of CTE, who led the group's step-by-step expansion.

With a vision to construct an "information silk road of the 21st century", CTE focused on developing low latency terrestrial cables through Russia to connect Europe with China, enabling a fast and reliable transfer of information.

Compared to the more commonly accepted technology of submarine cables, which are found on the ocean's floors, Ou's team initially found it very difficult to convince European customers of the benefits of CTE's Euro-Asia Network Solution (ENS).

"We were well-known in China, but here we had to start from scratch. People would only trust us if we provided references from previous European customers, but we didn't have any."

An unexpected event changed CTE's fate.

In December 2006, the Hengchun earthquake just off the south coast of Taiwan interrupted five submarine cables, cutting the Internet connection between Europe and Asia.

But China Telecom's trans-Russian network wasn't affected, Ou says. "Tier 1 carriers asked us to provide connections between London and Hong Kong within five days. We took three days."

The achievement won trust for CTE, and its customers grew from there.

With a greatly expanded team of 65, CTE's London branch now occupies two floors of a Thames-side office overlooking the Canary Wharf, the city's new financial district. There is a branch in Germany as well as subsidiary offices in Russia and the United Arab Emirates.

CTE's annual revenue in 2011 hit a record of 21 million pounds ($33 million, 25 million euros), a 60 percent increase from the previous year. It established 10 points of presence (an access point from one place to the rest of the Internet) in locations including London, Frankfurt, Stockholm, Moscow, Paris, Johannesburg, Helsinki and Dubai in the United Arab Emirates.

CTE's ENS has grown from just one cable to four cables, winding through Russia, Mongolia and Kazakhstan. Together they allow CTE to deliver any combination of voice, video, data and IP traffic simultaneously, and offer single channel connection speeds of up to 10 gigabytes per second.

Another recent natural disaster gave CTE the opportunity to display its competitiveness.

In April 2010, the eruption of Iceland's Eyjafjallajokull Volcano disrupted many flights. Plans to fly a promotional video for the London Olympics' mascot made by a Chinese company became impossible.

The London Organizing Committee for the Olympic Games (LOCOG) asked a British company for help transferring the files via the Internet, and was told that the process would take 30 hours.

"As the press conference for the film's release approached, LOCOG contacted us, and we helped them to transfer the files . The whole process took only 50 minutes," Ou says proudly.

CTE's stories of technological breakthroughs don't stop there.

It recently announced the launch of its UK mobile phone business under an agreement with Everything Everywhere, the largest mobile operator in the United Kingdom by customer numbers.

After the official launch in May, CTE's SIM cards will be available to UK customers, providing dual-language services as well as international calls to China and services for callers in China to contact mobile users in the UK.

CTE will become the first Chinese company to hire and operate a foreign network.

"There is a real gap in the market for the provision of tailored mobile services and competitive tariffs aimed at the growing Chinese population in the UK," says Ou, explaining that the product targets mainly Chinese residents and visitors in the UK.

But competition will be tough since service providers in the UK focusing on the international calling market, including Lebara and LycaMobile, already provide call rates for as little as 1 penny per minute.

"We aren't going to start a price war since international phone calls are already very cheap. We hope to provide a targeted service that makes life convenient for customers," Ou says.

CTE's new SIM cards will be available for sale on its website as well as through Chinese community associations and tourist agencies. More credits can be added at selected convenience stores.

"We want to use the UK market as a test to find out what customers want. After that, we may expand the same service to France and Germany, and eventually the whole of Europe," he says.

There are about 2 million Chinese living in Europe, mostly in France, the UK, Germany, Spain and Italy, and more than 600,000 Chinese in the UK alone - the same number of Chinese visitors every year - the Financial Times reported.

Managing a growing company servicing many countries across Europe, Ou admits that different cultures, languages and legal systems still present a challenge.

"It takes time to understand the local way of doing business every time we go to a different country, so we learn along the way," Ou says.

To adapt to local cultures, CTE has hired staff from a wide range of countries, only transferring 10 out of 65 workers from the company's head office in China.

English is used as a standard language for official documents. "I tell my staff it is fine to speak in their own languages, but they must use English in e-mails because other people need to continue their work at times when they are on leave," he explains.

To rejoice in the team's multiculturalism, Chinese festivals are frequently celebrated at CTE.

During this year's Chinese New Year festival, CTE made a short film asking all its employees to say New Year's greetings in their mother tongues.

"We counted 18 different languages before our Chinese employees protested and said that they must record dialects of their home cities, and that added a dozen or so Chinese dialects to the film."

Having successfully established a presence in Europe and consolidated a multicultural team of staff, Ou is keen to help other Chinese businesses in their European expansions.

Last March, CTE, HSBC, Jones Lang LaSalle and KPMG together founded the London Chamber of Commerce Chinese Business Association. Ou was appointed chairman.

One year later, the chamber already has dozens of Chinese member companies, and almost the same number of British member companies.

"The goal of our association is to help Chinese companies break into the UK market, and also use their UK branch as a base to service the wider European markets. As well, it gives a voice to Chinese businesses in the UK and allow us to collectively express our views," Ou says.

The association also helps British companies break into the Chinese market. Ou will lead a delegation of British businesses to explore business opportunities in Beijing and Chongqing in May.

Commitments at the chamber keep Ou very busy, especially considering that CTE has many ambitious plans for 2012. The company aims to start a branch in Kenya, transform the Moscow representative office into a branch and build new representative offices in Kenya and Turkey.

Ou describes his life in the UK as "busy, but fulfilling". "What makes me most happy since coming to the UK is to see my business grow to the scale it is now. I feel my hard work has been rewarded."

Contact the writers at cecily.liu@chinadaily.com.cn and zhangchunyan@chinadaily.com.cn