CHINA, November 30, 2000 - China's second largest telecommunications carrier, China United Telecommunications Corporation (China Unicom: NYSE: CHU; SEHK: 762), has selected Cisco Systems (NASDAQ: CSCO; SEHK: CISCO - T, 4333) as the lead supplier in a nationwide multimillion-dollar Voice-over-Internet-Protocol (VoIP) communications network spanning more than 319 cities across 30 provinces in the PRC. When complete the network will rank as the world's largest VoIP network.
Under a multiphase contract, Cisco Systems will supply IP core backbone and aggregation routers and switches as well as voice applications for the packet-based network. China Unicom's network will be based around five major hubbing points, with Beijing acting as the centre, and Shanghai, Chengdu, Shenzhen and Guangzhou as supporting hubs.
According to telecommunications research firm Probe Research, China's VoIP services are expected to account for 15 - 20 percent of all packet-based telephony traffic carried worldwide by the year 2005. This equates to more than 60 billion voice minutes of an estimated 570 billion voice minutes carried annually over packet networks. Currently around 7.7 billion minutes of voice traffic are transmitted via packet networks per year.
"With the deregulation of PRC's telecom market and the close proximity of full entry of China into the World Trade Organisation, China Unicom has great expectations for our VoIP network to provide easier and cheaper access to residential and corporate customers for both domestic and international usage," said Mr. Liu Yunjie, General Engineer and Vice President of China Unicom.
Equipment being provided by Cisco for the national network includes IP backbone core routers and aggregation routers including AS5800s, AS5300s Voice Gateways, 7200 Gatekeeper, Catalyst series switches as well as prepaid and post-paid voice applications.
Mr. Duh Jia-bin, managing director of Cisco Systems' operations in the PRC said, "Cisco Systems is very pleased to be expanding our relationship with China Unicom. This agreement is evidence of the fact that VoIP deployment by leading carriers is becoming mainstream on a global basis."
"The exploding rise of packet-based telephony networks in China and indeed, across the Asia Pacific region, can be attributed to a number of factors such as the deregulation of telecom networks, the carriers' need to deploy services quickly and cost effectively, and the dramatic improvements in quality and reliability of carrying voice over networks today," said Frankie Sum, managing director of Cisco Systems (HK) Limited. "Cisco Systems is installing VoIP networks for customers all across Asia using best-of-breed equipment enabling carriers' to generate new sources of revenue."
"By embracing a packet telephony infrastructure, telecom companies are building a foundation for future profitability. Asia is a market that has seen a dramatic increase in the convergence of data, voice and video over a single network which results in significant cost-saving for the carriers, and at the same time, giving customers the same carrier-class quality of service they would get from public switched telephone networks," he said.
