Taking a break from its merger travails back in the USA, AT&T (NYSE:T, news, filings) deepened its relationships in the largest market in the world today. China Telecom (NYSE:CHA, news, filings) and AT&T have signed a strategic framework agreement aimed at better serving the needs of multinational customers.
Under the agreement, the two are working toward:
- Expanding AT&T's IP-VPN service within China both geographically and technologically. They will jointly explore expanding the suite of VPN-based services as well to include things like telepresence and cloud-based services.
- Connect China Telecom's IP-MPLS network in the US to that of AT&T to help China Telecom's ability to serve the burdgeoning population of Chinese multinational customers.
- Add other mutual support relationships, including bilateral WiFi and more efficient intercompany processes.
Doing telecommunications business with China always requires a local partner, and in the fixed line space China Telecom is the 800Kg Gorilla although it lags China Mobile in the wireless department. These two companies have long worked together, having had a joint venture on the ground for a decade.
I find it interesting though that the agreement talks more than in the past about serving China's own multinational companies. The more mutual tone to the PR demonstrates an ongoing shift in the economic balance of power of course. As many readers know, I spend a fair amount of time in China itself, and while the country's big players have plenty of their own internal issues they definitely aren't kidding around when it comes to an expanded global focus.
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