News Release

China Telecom Selects Cisco as Primary Supplier for ChinaNet 2006 Expansion

Cisco CRS-1 and 12000 Series Routers Enhance Network Capability and Service Offerings
Jul 05, 2006

BEIJING, July 6, 2006 - Cisco Systems today announced that China Telecom has selected the Cisco® Internet Protocol Next-Generation Network (IP NGN) architecture as the foundation of its 2006 ChinaNet network expansion and has named Cisco as the primary equipment provider for the project. Cisco solutions that will be deployed in ChinaNet's network include the high-end Cisco CRS-1 Carrier Routing System and significant upgrades to its existing Cisco 12000 Series Routers, which will expand the ChinaNet core network's capabilities, reliability and scalability.

As a global leader and China's largest IP service network, ChinaNet is a public communication platform supporting China Telecom's Internet value-added service development. ChinaNet has 25 million broadband subscribers, delivering Internet access and value-added services such as Internet Data Center (IDC) and virtual network services. Market forecasters predict that China Telecom will have 38 million broadband subscribers by 2007.

The rapid growth of the broadband customer base, along with constantly expanding high-bandwidth Internet applications, including video phones, online games and video on demand (VoD), continue to stimulate demand for increased bandwidth. Continuous increases of ChinaNet's network capacity are needed in order to meet business requirements, improve service quality and satisfy customer demand. The network has received seven upgrades since its commencement in 1995.

During the 2005 expansion, China Telecom deployed eight units of the Cisco CRS-1 to integrate and upgrade ChinaNet's supercore network nodes in Beijing, Shanghai, Guangzhou, Tianjin, Xi'an, Chengdu, Wuhan and Nanjing. The Cisco CRS-1 has greatly expanded ChinaNet's network capacity and enabled China Telecom to offer data, voice and video services on a converged IP network while at the same time offering protection on its investment in the system. The remarkably improved network performance in 2005 led to China Telecom naming Cisco as the primary equipment provider in the 2006 network expansion.

The 2006 expansion will take advantage of the existing eight CRS-1 platforms and will enable ChinaNet to migrate to an all-IP backbone network with CRS-1 at the network core. China Telecom's CRS-1 deployment is one of the largest in the world, and the company is one of the first five service providers in the world to install the multichassis configuration of the CRS-1, which delivers even greater capacity. To date, more than 50 Cisco customers around the globe have deployed the Cisco CRS-1.

Hanh Tu, vice president for Cisco Systems China, commented: "Cisco is very pleased to play another critical role in the latest ChinaNet backbone network expansion. With the CRS-1 and Cisco 12000 Series Routers running on ChinaNet, China's core IP network is among the most technologically advanced in the world, delivering the capacity to meet its customers' growing bandwidth needs. Cisco will continue to offer our industry-leading technologies to help China Telecom sharpen its competitiveness and accelerate the development of China's Internet and information industry as a whole."

About ChinaNet

ChinaNet is a public Internet service network operated by China Telecom. It boasts the highest bandwidth, the largest geographic coverage, and the most advanced network structure and configuration in China. ChinaNet covers every corner in China that has access to telephone network and it is also the largest Chinese-language information network in the world.

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.