News Release

Cisco Selected to Build Backbone and Premium Business Network for China Telecom's IP Next Generation Network

Cisco core and service routers deployed to secure customer benefits and support future metropolitan-area-network operation
Nov 12, 2004

BEIJING, November 11, 2004- Cisco Systems® announced today that it has been selected by China Telecom as the primary equipment provider for the business network portion of the China Telecom Internet Protocol (IP) Next-Generation Network (also known as ChinaNet Next Carrying Network or CN2). CN2 will connect more than 200 cities and provide premium services to corporate customers nationwide. Cisco also will provide equipment for the backbone network in Jiangsu, Hubei, Zhejiang, Anhui, Fujian and Jiangxi provinces. These provinces contain the largest concentration of Chinese enterprises and the highest Internet traffic volume in the country. In the past 6 months, China Telecom has awarded contracts valued at more than US$100 million to Cisco.

China Telecom is deploying the first phase of CN2 as part of its goal of becoming one of the world's largest providers of IP services within 10 to 20 years. The CN2 project will interconnect with ChinaNet's overseas points of presence (POPs) which use the Cisco® ONS 15454 platform in the United States and Hong Kong. This allows for international Multiprotocol Label Switching (MPLS)-based virtual private network (VPN) services internationally.

The business network will deploy Cisco 12000 Series routers, providing industry-leading MPLS VPN services and serving as a robust platform for future metropolitan-area-network (MAN) deployments.

Mr. Jia-Bin Duh, president of Cisco Systems China, commented, "Through extensive collaboration with China Telecom during the construction of ChinaNet, Cisco understands China Telecom's need to maintain a reliable and scalable network and generate new business opportunities. We are very pleased to be continuing our excellent relationship with China Telecom and look forward to playing a part in the successful development of the CN2 network."

As the most advanced network service available for domestic users, ChinaNet is the largest public network and boasted the greatest number of Internet subscribers in China. Cisco has been the primary equipment provider, and has collaborated with China Telecom on construction and maintenance of the network. In 2000, ChinaNet chose Cisco technology to expand its network link capacity from 155 megabits per second (Mbps) to 2.5 gigabits per second (Gbps). In 2001, Cisco provided ChinaNet with STM-64/OC-192c line cards using its existing Cisco 12000 Series routers. In 2003, the southern network of ChinaNet was updated to 10 Gbps with Cisco 12000 Series routers. In the latest backbone network expansion of ChinaNet in August 2004, Cisco 12816 routers were deployed in 18 of China Telecom's provincial networks, increasing the link capacity to 10 Gbps.

About China Telecom

China Telecom is the country's largest telecommunications operator with businesses covering fixed lines and various value-added Internet services. During 2001 alone, China Telecom added 35 million fixed line subscribers, about 50 percent of the world's subscriber growth for the year, and increased its total subscriber base to 179 million, 99 percent of China's total. At present, China Telecom's national Internet network, ChinaNet, serves approximately 80 percent of the national total of all Internet users.