China ISP introduces wireless broadband

BEIJING -- CBCom Inc., a fast growing privately owned Internet service provider in China, has introduced wireless broadband access and control to provide a turnkey solution to companies as well as large public forums such as airports, hotels and hospitals. CBCom has already signed up a hospital, a number of hotels and a club in Beijing.

CBCom introduces its own wireless and wired broadband access products based on a centralized server located in one of its main IT centers, and low cost satellite servers located in each of its customer locations. CBCom's products are distinguished from other competing products in that they are sold as part of a total broadband control solution and CBCom will earn revenue on both broadband access and maintenance contracts.

The system allows the operation of a comprehensive wireless and wired broadband network with no local IT maintenance staff required. CBCom's products are one of the fastest and easiest systems to implement. All system maintenance, backups, and software updates are handled remotely. Customer installed hardware is modular and any failure of any network component can be restored within minutes.

The system allows local operators to completely control their networks through access to CBCom's centralized management servers. Customers have a suite of billing options that can integrate with their existing billing systems, with provisions for advertising and other value-added services.

Broadband struggle

"With all the expectations of growth in wireless broadband, it is still virtually unused in China," said Gordon Gao, a US-educated expert on technological development in China. "Even where there are multiple users, such as public access in shopping centers, internet cafes, etc., the major carriers continue to struggle to efficiently install broadband."

Gao added that CBCom has found "a quick and low cost way to allow anyone to enjoy wireless and wired broadband and we make money on the broadband access and maintenance contract fees. The flexibility of the system's bandwidth control and billing integration capabilities make it just as useful for a hotel as it is useful for managing networks in a large office building. Wireless broadband revenues are no longer reserved for the large telecoms."

CBCom Inc., through its strategic partnership, is the fastest-growing non-state-owned Internet Service Provider in China, with a subscriber base of over 400,000. CBCom has assembled a core management team experienced in start-up operations, financial management, marketing and the Chinese telecom market.

Competitive landscape

According to CBCom, the competitive landscape for China ISPs is one where there are a handful of large current and potential players and hundreds of small players. However, in an effort to meet World Trade Organization regulations and create a more competitive marketplace, the People's Republic of China has begun to dismantle the most powerful and dominating telecommunications provider: China Telecom. Until recently, China Telecom's CHINANET has been the most powerful and dominating ISP, offering services in all major cities. 

With the breakup, China Telecom is now four individual entities: CHINANET (backbone access provider and ISP), local service, long-distance service, and wireless service. Other, government supported Internet access providers include CHINAGBN, UNINET, CNCNET, CSTNET, and CERNET. While combined these entities make up nearly 10% of Internet access, it is in the form of cellular and paging services, as well as traffic from local government agencies and educational institutions. 

Foreign Telco players such as AOL, EarthLink, AT&T and UUNET (MCI WorldCom's ISP subsidiary) and others are waiting on the sidelines. With investments already in Hong Kong and South East Asia, US Internet giant America Online (AOL), is eager to do business in China, but it is holding off in part because of China's restrictions on foreign investment in its Internet sector, waiting to act "at the right time and in the right way." 

While extremely resourceful and well funded, large companies like AOL would call attention to themselves by making any investments prior to official WTO sanctioning, according to CBCom. On the other hand, CBCom claims it is positioned to exploit this window of opportunity by maintaining a low profile and avoiding the scrutiny large players would be subject to. 

300 ISPs in China

As of September 1999, China had approved more than 300 ISPs and, although some established a national presence as early as 1996, they are in an extremely precarious position. Most domestic ISP license-holders cannot compete with the market leader, CHINANET.

China is rapidly taking a lead in the global Internet economy. CNNIC, the sole government-sanctioned Internet research organization, last reported 22.5 million Internet Users in China, up from 4 million by year-end 1999. Experiencing 300% growth rate (three times that of the combined world average), Internet usage doubled every six months from 1998 to 2000. In 1999 only 16% of the population in the three biggest cities owned PC's and, of that, 1.5% were online. Experts estimates vary between 85 million Internet users by 2005, by ChinaOnline, to 37.5 million by the same time period, by Computer Economics Inc.