China Telecom to build data center

Updated: 2010-09-29 06:47

By Li Tao(HK Edition)

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 China Telecom to build data center

A security guard stands outside a China Telecom Corp branch office in Beijing in March, 2010. The company said Tuesday that it will invest about HK$200 million to build internet data centers in Hong Kong and Singapore. Adam Dean / Bloomberg News

Firm looking to diversify its business, expand global footprint

China Telecom Corp, the country's largest fixed-line carrier, said Tuesday it will invest about HK$200 million to build internet data centers (IDCs) in Hong Kong and Singapore. The company is looking to diversify its business and grow its international presence.

"The launch of IDCs in both of these Asia Pacific gateway cities marks an important milestone in China Telecom's globalization," said Deng Xiaofeng, chief executive officer of China Telecom's international arm. "We can now offer an unrivalled IDC network and integration with a wide range of information and communication technology (ICT) application extensions to our clients."

China Telecom will also look for opportunities to build more data centers in other developed, open markets - such as Japan and Australia - to further extend its global coverage, he said.

Deng added that these first steps outside China Telecom's home market will enhance opportunities not only for Asian companies expanding their reach, but also for Western companies to grow in Asia.

An IDC industry study in 2009 showed that despite the global economic downturn, China's IDC market maintained strong growth figures.

The total size of China's IDC market size reached $667 million last year, an increase of 23 percent from 2008 and is expected to reach $1.9 billion by 2014 - a five-year compound growth rate of 24 percent per year.

China Telecom, which currently owns five data bases in Beijing, Shanghai, Guangzhou, Xi'an and Chengdu, and over 260 data centers across the country, is the smallest of China's three wireless carriers, trailing China Mobile Ltd and China Unicom (Hong Kong) Ltd.

Because of escalating competition and huge marketing expenses, all three carriers are looking for diversified business opportunities to fuel growth.

China Telecom's first-half net profit ended June 30 rose just 0.9 percent to 9.08 billion yuan compared with 9 billion a year earlier. The number of its fixed-line accounts fell a further 4 percent from the end of 2009 to 181 million as of June 30 this year.

The company plans to lift capital spending to 44.0 billion yuan this year from its March forecast of 39.00 billion yuan to enhance coverage of its broadband business. It expects to add more than 10 million broadband internet users this year to counter its shrinking fixed-line business.

China Daily

(HK Edition 09/29/2010 page2)