Alcatel to develop broadband for Chinese telecom service providers

Shanghai: Alcatel (Paris: CGEP.PA and NYSE: ALA) and Shanda Networking Company Limited, China's largest online game operator, have announced having signed a memorandum of understanding (MoU) to jointly develop integrated broadband solutions for telecom service providers in China.

The first of its kind in China, the partnership is established to drive the development of broadband entertainment services in this fast-growing broadband market. The MoU was signed through Alcatel Shanghai Bell, Alcatel's flagship Chinese company. Alcatel Shanghai Bell is the first foreign-invested company limited by shares in the telecommunications sector in China, with Alcatel holding 50 per cent +1 shares and Chinese shareholders holding the remainder.

Under the agreement, Alcatel will sell its market-leading Digital Subscriber Line (DSL) solution in combination with Shanda's latest online gaming suite to deliver a total broadband offer to telecom service providers in China. Alcatel will also provide consultancy to service providers in marketing the gaming applications to end-users.

Alcatel holds the number one position in the DSL market in all regions in the world. According to the latest data from telecommunications industry analyst firm Dell'Oro Group, Alcatel today has a cumulative market share of 37.6 per cent and a cumulative total of nearly 45 million DSL lines shipped.

"The impressive growth of broadband subscribers in China presents huge opportunities for service providers. Alcatel, with its leading position in the DSL market worldwide and in Asia Pacific, is committed to partnering with major industry players to provide technically and economically viable broadband solutions to our customers," said Michel Rahier, chief operating officer of Alcatel's fixed communications activities. "The co-operation with Shanda represents a significant step along the way to our goal of helping service providers deliver broadband services through innovative partnerships."

Shanda Networking, an affiliate of Shanda Interactive Entertainment Limited, is the largest operator of online games in China, offering a portfolio of online games that are licensed from third parties and others that are developed in-house.

Chen Tianqiao, Chairman and CEO of Shanda Networking Interactive Entertainment, added, "Alcatel is a recognised leader and pioneer in broadband. We are confident that the partnership will combine the strong brand image and core competencies of both companies to bring significant benefits to the service providers and the broadband industry in China."

According to forecasts from China's ministry of information industry, the broadband market in China is expected to exceed 10 million subscribers in 2004.