AT&T (NYSE: T) on Tuesday began offering a broader suite of networking services to multinational corporations that are expanding their presence in China through its long-running relationship with carrier partner China Telecom (NYSE: CHA).
These new service initiatives build off a long-running relationship between the two service providers which began in 2000, when they formed the Shanghai Symphony Telecommunications Co. (SST) joint venture.
In November 2011, the two telcos expanded their relationship, allowing China Telecom to improve services to Asian customers in the United States over AT&T's network.
Expanding network coverage for both carriers is a key part of this agreement. The two service providers have established a network to network interconnect (NNI) agreement in New York and San José, Calif., which enables China Telecom to expand its own Ethernet and MPLS in the United States and major international cities to serve a number of Chinese-based multinational corporations (MNCs).
In addition, AT&T and China Telecom are developing methods to automate their inter-carrier processes to deliver and support the services they provide to their customers in China and the United States.
Having partners like China Telecom has helped AT&T win some large business accounts, including IBM and Eaton, both of which have a large presence in China. Instead of looking for local partners, U.S.-based MNCs that are looking to establish offices in China can now turn to AT&T.
With competition heating up amongst traditional U.S. and international telcos to serve MNCs with presence in multiple international regions, China Telecom is just one of many service providers that AT&T has established a partnership with to address this need.
A key focus of the agreement with China Telecom is the delivery of VPN, Ethernet and Unified Communications--three next-generation service sets that have been generating the bulk of revenue for AT&T's business service portfolio.
While AT&T won't release its fourth quarter financial results until Thursday, in Q3 2012 strategic services like Ethernet and VPN grew 11.4 percent year-over-year. Total business data revenues grew 0.6 percent year-over-year, continuing the transition from legacy data products like Frame Relay and ATM to next-generation data services.
- see the release
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