Original URL: http://www.theregister.co.uk/2012/06/15/bt_apac_china/

BT to China: let me in!

British telco has formed partnerships but wants full access

By Phil Muncaster

Posted in Networks, 15th June 2012 04:22 GMT

BT has turned up the heat on the Chinese government, demanding that international telcos be allowed to sell their wares directly into the country.

The telecoms giant’s APAC president, Kevin Taylor, told attendees at its Asia Pacific Influencer Summit in Hong Kong on Thursday that it has a good “two way partnership” with domestic operators China Unicom and China Telecom and has set up R&D centres in the People's Republic.

BT wants to expand beyond these partnerships but the government will not grant foreign firms full telecoms licenses.

“China is the least advanced regulatory big player in the world, let’s be frank,” said Taylor.

“We’d love to see it open its doors to allow international companies to sell telecoms directly into China. Downstream, there needs to be a maturity from China which I’m sure will come.”

China Telecom has already launched a UK service that piggy-backs on Everything Everywhere’s network, Taylor pointed out, adding that he’d like to see a similar opportunity given to BT in China.

The other option open to the telecoms behemoth is to go into a joint venture with a Chinese operator offering value add services, but at present rules restrict the foreign partner to a maximum 49 per cent share of the business.

“We’d like to see the needle moved in favour of the international company investing,” said Taylor.

“We could have 49 per cent but there’s no value add. It costs money but with no control.”

The Reg spoke to analysts from IDC, Ovum and Frost & Sullivan at the event and the unanimous verdict was that BT’s demands are unlikely to be met.

Ovum analyst Jane Wang added that China’s three major operators in general are unwilling to partner as they feel there is no value add in doing so.

Few foreign operators – Vodafone, Telefonica, SK Telecom and AT&T among them – have partnered up in China and most abandoned such deals for one reason or another, she added.

Undeterred, BT is pushing ahead with its China strategy, launching a new managed service designed to help global retailers who want to expand into the region to tap the huge market there.

The ‘Retail in a Box’ package includes network services, disaster recovery, web performance monitoring, infrastructure and field services to support multi-channel retail strategies, the firm said.

BT China MD, Eliza Kwok, told The Reg that thanks to mass urbanisation, a growing middle class and a forecast to become the world’s number one market for luxury goods pretty soon, “global retailers need to put a foot in China very quickly”.

“We’re giving retailers the ability to come to China and get access to all 31 provinces and 1.3 billion potential customers,” she said.

Kwok would not name the “local partners” who help BT make the service possible. ®