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Since 1989 when China participated in international optical cable construction, the country has enjoyed rapid development in the industry, the Dongfang Daily reported on December 20. The seabed cables connecting China and Japan, China and Russia, Asia and Europe, China and America have been completed. Moreover, China has also invested in a dozen of international cables.

Meanwhile, the number of Chinese netizens rose to 123 million this year, with wide-band network users numbering 77 million. This potentially huge market has accordingly attracted global Internet service providers (ISPs).

But so far foreign communications companies basically can't win these potential consumers except those who have already established joint ventures with Chinese partners.

Some companies from the United States have provided Chinese consumers with special data base, phone and network service. A week ago, AT&T announced the establishment of its Shanghai Internet data center to offer Enterprise Hosting Services.

Greg Brutus, Asian and Pacific regional PR director of AT&T explained that his company aims to provide network service for global transnational enterprises, and during the competitions, AT&T "is confident to win."

Fourteen ISPs from nine countries have cooperated with China in the construction of the current China-US optical cable network since 1997. These companies include KDD Corp. of Japan, MCI of Canada, AT&T, SK (South Korea) Telecom Co., and China Telecommunications Corporation (China Telecom). China Telecom is the country's dominant fixed-line telephone carrier, with its annual overseas turnover expected to hit 1.2 billion yuan (US$153 million) this year, said Wang Xiaochu, general manager of China Telecom in mid-December on the sidelines of a ceremony marking the fifth anniversary of China's accession to the World Trade Organization (WTO).

Although overseas telecommunications companies are very active in Chinese market, so far no company has ever provided Chinese consumers with such basic service as domestic long-distance call and Internet connection. The Verizon Communications and AT&T are hoping their China branches to make a breakthrough in this field when developing their business in China, insiders said.

Theoretically China has opened up these service areas since 2001 when it became a member country of WTO. However, in China telecommunications industry is still under the strict control of the central government which doesn't allow foreign companies to provide such service unless they establish joint ventures with Chinese partners, and at the same time their shareholding proportion should be below 49 percent.

In a joint venture, investment from the foreign partner must stand at US$25 billion. Considering the monopoly position of Chinese state-owned communications enterprises, foreign companies think it is difficult for them to win profit with such investment volume, according to the newspaper report.

So far, US telecommunications companies are not the most active ones in Asia. In June this year, the SK Telecom Co. agreed to invest US$1 billion to cooperate with the China Unicom Co. Ltd. (China Unicom) in establishing a strategic union. China Unicom is the country's second largest mobile operator only after China Mobile. The Vodafone Group PLC of Britain now owns more than 3 percent shareholding right of the China Mobile.

China's telecommunications sector is expected to see stable growth in 2005, with total revenues of 579.9 billion yuan (US$71.93 billion), up 11.7 percent from the previous year, according to the information published on the Ministry of Information Industry website in mid July.

(China.org.cn by Li Jingrong, December 25, 2006)