AT&T chief eyes promise of expansion in mainland
CHINA (SCMP.com) - AT&T China president Art Kobler said the restructuring would allow the management to focus more on business operations which offer data and Internet services, outsourcing, consulting and networking integration to companies.
"That will greatly benefit our efforts in the mainland, where our focus is on enterprise customers," he said.
AT&T in October announced plans to create four companies - consumer, business, broadband and wireless. Operating under the AT&T brand, the companies will conform to uniform standards of quality and bundle their services. The restructuring is expected to be completed in 2002.
Last week, AT&T became the first foreign company to provide direct communications services in China, when it signed agreements to form a joint venture that would provide broadband Internet protocol (IP) services to businesses in Shanghai's Pudong area.
Partners in the venture include Shanghai Telecom, a subsidiary of nationwide carrier China Mobile, and Shanghai Information Investment.
The company, Shanghai Symphony Telecommunications, also is the first joint venture to operate in the mainland's fast-growing telecommunications service market. Commercial operations are expected to start in the middle of next year.
Mr Kobler said the venture would offer services such as IP virtual private networks, managed access, Web-hosting and electronic commerce, as well as seamless connectivity to AT&T's communications network and services.
"We see the AT&T restructuring plan having a positive impact on our joint venture in China since the four new AT&T companies will continue to collaborate with one another," he said.
For example, the principal unit - AT&T Business - will bundle AT&T Wireless' services when serving its business customers.
AT&T Business is expected to generate nearly a third of its revenue from data and IP services. It has signed more than US$12 billion worth of outsourcing and network management contracts since October.
In Pudong, AT&T targets its IP-based broadband communications services mainly at large multinational companies, such as General Motors and Citibank.
IP-based broadband uses high-speed data communications through the Internet and works across disparate networks, computers and communications platforms.
Opportunities to provide similar services were expected to open up in Beijing, Shanghai and Guangzhou when China gained World Trade Organisation accession, Mr Kobler said.
He said AT&T was looking to provide wireless communications to enterprises in the mainland, which has the fastest-growing mobile-phone market in the world.
"We expect [AT&T Wireless] will continue to achieve strong growth, and possibly reach even greater stature, depending on its success in wireless Internet and mobile-commerce applications," said Brian Adamik, president of research firm The Yankee Group.