Association with international telecom organizations

During 2004, China Telecom joined the Radio Communications Bureau (ITU-R) of the ITU as a sector member [with this joining, China Telecom became a sector member of the ITU-T (Telecommunication Standardization Bureau), ITU-R and ITU-D (Telecommunication Development Bureau)] and took part in activities of the three bureux; and joined the Open Mobile Association (OMA) as a Full Member and took part in its activities from October. As a member or a share holder, China Telecom also actively took part in a ctiv ities of the following i nterna tiona l tele com organizations/entities: Pacific Telecommunications Council (PTC), Intelsat, Ltd., New skies Satellite N.V. (NSS), Asia-Pacific Network Information Center (APNIC) and Asian Info-communications Council (AIC).

Development of China Telecom (USA) Corporation

During 2004, China Telecom (USA) Corporation built up the trans-American continent telecom network and implemented the following important projects: CHINANET extension, China US Cable System extension, China-US international dedicate line extension and voice switching network and its operation, China-US international transmission capacity extension and CHINANET capacity extension, construction of POP nodes in Los Angeles, San Francisco, Washington, D.C. and New York. The implementation of all these projects has greatly enhanced China Telecom's international reaching capability, reduced China Telecom's international communications costs and expanded China Telecom's international service range. Among the projects, the CHINANET extension is a crossing-Pacific project. It extends the international nodes of the CHINANET into the USA. The four international nodes which are set up in the USA bear the majority of China's international outbound Internet flow so that CHINANET can interconnect in the USA with internationally well-known ICPs and ISPs in a reciprocity way, thus, the situation in the past CHINANET mainly relied on US Internet operators so it should spent money to buy some capacity from them to transit China's international outbound flow was changed, a lot of capital of the state was saved. The setting up of the four nodes in the USA has provided China Telecom (USA) Corporation with a basic platform in the USA for developing the IP service. By utilizing the platform, the corporation can provide the Internet access service with different transmission rates in the USA. In order to increase the international outbound bandwidth of CHINANET, in 2004, China Telecom decided to expand the capacity of the four nodes set in the USA by almost twofold. After the completion of the project, the domestic CHINANET customers of China Telecom will be able to visit international websites in a more unimpeded way and quicker speed. According to the China-US cable Network extension project, a 2.5Gbit/s wavelength loop was built along the west coast of the USA, that links the landing stations of the China-US cable in the west coast and all the POP nodes of China Telecom in the USA, providing highly-efficient protection lines. With the project, the voice switching network has possessed a voice switching capacity of 40 million minutes, thus, the bill processing capability for customer data has been enhanced and the international coverage of the voice network has greatly expanded. While developing the network, the services operated by China Telecom (USA) Corporation has been developing rapidly, a united, highly-efficient and localized sales team has been set up and its function has covered the whole country of the USA. The corporation has set up sales representative offices in such important places as San Jose, Los Angeles, Boston, New York, New Jersey, Houston and Washington, D.C. In line with China Telecom's overseas expansion strategy of "Three Extensions" (network extension, service extension and business extension), based on over two years of successful market exploration in the USA, China Telecom (USA) has thrown its sight to the whole North America, especially the Canadian market. With ever developing of China's economy and increase of commercial activities between China and Canada, Canadian enterprises further require high-quality, stable and fast telecom products and services between China and Canada. Based on some preparations, China Telecom (USA) Corporation set up its Canadian representative office in Toronto in January 2005 according to registration and got the license for telecom operation in Canada at the same time. China Telecom will provide the Canadian market with international dedicated lines, IP access, voice and reciprocal Internet services and provide Canadian customers with international "one-stop" telecom services of high-quality and variety, which address to China and other places in Asia. Entering the Canadian market is an important action taken by China Telecom (USA) Corporation to implement the Three Extension Strategy. China Telecom (USA) Corporation wishes, by taking this opportunity, to expand the customer group, explore new services, open up new market places, actively implement China Telecom's strategies for overseas exploration and continuously encounter opportunities and challenges so as to try the best to get greater achievements.

Development of Hong Kong Corporation

On 3 June 2004, China Telecom (Hong Kong) International Ltd. announced the opening of the Hong Kong PoP node and its formal operation within the trans-globe network of China Telecom

Corporation Limited. Following the US PAIX, nodes in Los Angeles, NewYork and Washington, D.C., CHINANET's Hong Kong PoP node is the fifth overseas node of China Telecom and is an important element of the planned and to be constructed global communications network of China Telecom. Together with the nationwide CHINANET backbone network, the overseas CHINANET nodes provide ISPs and ICPs in the globe, and especially in Hong Kong and the Asia-Pacific region with faster, more convenient, higher-efficient and unimpeded Internet networking and provide hitherto-unknown Internet services for the end users of ISPs and ICPs as well as Internet users in all of the said places. The opening of the Hong Kong PoP node symbolizes that the global network coverage of China Telecom has further been perfected and China Telecom's integrated international competitiveness and international brand value have been effectively enhanced.

Development of the European Office

On 8 September 2004, China Telecom held in London, UK the opening ceremony of China Telecom European Representative Office. The setting up of the European Office is another important action of China Telecom in exploring its overseas services. This action indicates that China Telecom has made an important step in implementing its strategy for internationalization of "expanding global sales system and enhancing service brand value". Strengthening exchange and cooperating with overseas telecom operators is an inevitable road for China Telecom to constantly strive for raising its international competitiveness and for being a world-class international telecom operator. The European Office will actively strengthen bilateral service cooperation between China Telecom and European telecom operators and develop services therein, be familiar with the local market and learn advanced experience from the European operators so as to serve the overall strategic development objectives: Customers' requirements are our objectives, we will provide customers throughout the world with more thoughtful and more satisfactory services.