By Chris Chang, posted Nov 30, 2011 at 8:03 PM, 356 views,

AT&T and China Telecom Agree to Expand Services in China and U.S.

Two carriers, AT&T and China Telecom, have joined forces to offer virtual private networks and other cross-border services to corporate customers at a lower cost and higher speed in the U.S. and China. Here’s how their partnership works:

On Wednesday, AT&T, the largest U.S. telephone carrier, signed a deal with China Telecom, to expand an 11-year partnership (since 2000) to provide more communication services to multinational companies in both countries. Here’s what Roman Pacewicz, senior vice-president of marketing and global strategy at AT&T Business Solutions, said,

“We are opening up our network in the US to China Telecom,”

Basically, AT&T will connect China Telecom to its data networks in the U.S. to provide service to Chinese multinationals. Moreover, the new agreement would enable China Telecom to serve its corporate customers in the US market by using AT&T’s assets just as the largest US telecoms group by revenues does in China by using China Telecom’s assets.

Why Both Companies Agree to Expand Partnership

You may not know, AT&T already provides services to more than 600 business customers in China, including virtual private networks that are being used to bypass China’s internet censorship. The reason why a new deal is formed between two companies is that China Telecom wants to start offering wireless services to consumers in the U.S. in order to serve Chinese Americans and Chinese tourists. However, due to concerns in the U.S. that the presence of Chinese-owned telecom infrastructure in the country could make it vulnerable to Chinese spying or cyber attacks, Chinese telecom operators could face regulatory hurdles if considering to build networks of their own in America. So, it would therefore be much easier for China Telecom to access a local partner’s network, and that’s AT&T.

Any future plans? Well, the two companies said they will consider providing mutual support in other regions of the world. AT&T’s Pacewicz also said the expansion of IP-based telecom services for multinational customers in China and the US would be rolled out next year. In the longer term, the two companies are also considering jointly offering other enterprise solutions including cloud computing services.

Source: AT&T via Reuters