By Herman Lai, posted Jan 5, 2012 at 2:37 AM, 248 views,

China Telecom Aggressively Expands Its Services Outside China

China Telecom, the nation’s largest fixed-line phone company is planning to expand into more European markets after establishing their first overseas wireless service in the U.K under an strategic partnership with Everything Everywhere. This move has highlighted their growing global clout and ambitions.

Everything Everywhere is created in July 2010 through the joint venture of the British operations of France Telecom and Deutsche Telekom. It has the biggest third-generation network in the U.K. and it is also U.K.’s biggest mobile operator by revenue. Moreover, Everything Everywhere on the strength of its shared T-Mobile and Orange network, that’s also one of the factors that China Telecom considered to partner with them. The China Telecom deal will increase the number of partners using Everything Everywhere’s telecommunications network to 24.

China Telecom will become the first Chinese carrier launched mobile-virtual-network-operator (MVNO) services outside China. Financial details of the deal weren’t disclosed. But it is normally much cheaper than acquiring expensive mobile infrastructure to offer mobile services directly to their customers when using an existing local carrier’s network. Plus, it is not an easy task to set up mobile infrastructure in U.K. since China Telecom is a Chinese company. That’s exactly the issue that ZTE and Huawei previously had when the two companies attempted to set up infrastructure in U.S.

China Telecom is expected to use the UK operations as the platform to launch similar services in other European countries, such as France and Germany. It also plans to look for a partner to provide services to Chinese residents in the US, where it has an arrangement with AT&T for use of its network for corporate customers.

There are currently 2 million Chinese living in western Europe, mostly in the UK, France, Germany, Spain and Italy. Besides, UK is one of the most popular destinations for Chinese tourists, the company said to be keen to roll out its service ahead of a predicted increase in visitor numbers for the Olympics this year. In other words, the company will target on Chinese citizens living in the country, Chinese tourists as well as some U.K. businesses. The company also said it would provide services in Chinese languages, as well as easy-access international calls back to China and services for callers in China to contact mobile users in the UK.

Yan Ou, managing director of China Telecom Europe, said:

“Entering the UK mobile market is a strategic move. We are keen to launch the service in the UK as soon as possible as there is a real gap in the market for the provision of tailored mobile services and competitive tariffs aimed at the growing Chinese population in the UK.”

At the moment, China Telecom’s wireless service ranks behind China Mobile and China Unicom in the world’s largest mobile market by users. Setting up a mobile virtual network will help China Telecom compete on international roaming rates with China United.

Source: Bloomberg, Everything Everywhere