Lucent To Build High-Speed Fiber Net Across China

HONG KONG (03/27/2000) - CITIC Pacific Ltd. and Lucent Technologies Inc. are to build a high-capacity fiber-optic data network to deliver voice, data, graphics and value-added services throughout much of China.

The IP (Internet Protocol) network, which will use dense wavelength-division multiplexing (DWDM), is scheduled to go into operation in the third quarter of this year and initially will have a total capacity of 400G bps (bits per second), officials of the two companies said today at a press conference and signing ceremony for the deal.

CITIC Pacific will invest US$80 million in the construction of the China Express No. 1 Backbone Network, the companies said. With a central ring connecting Beijing, Shanghai, Guangzhou and Wuhan, the network will stretch from Harbin, in China's most northern province, to Shenzhen, near Hong Kong, in the south. It will stretch at least as far west as Lhasa, in Tibet, they said.

Lucent's 80-channel DWDM system, the WaveStar OLS 400G, will be used in the core of the network. DWDM uses multiple colors of light to transmit more than one stream of information at a time over a single strand of fiber.

Although the project will greatly expand the capacity available for Internet and other services in China, CITIC expects the exploding use of the Internet to create further opportunities in the years ahead.

"This is still not enough for China's needs for infrastructure," said Larry Yung, chairman of CITIC Pacific.

A Lucent executive told the press conference that CITIC Pacific is one of the most aggressive deployers of DWDM among the company's customers worldwide. He said Lucent is committed to investments in the country, regardless whether China is admitted to the World Trade Organization (WTO).

"We've already decided to invest more in China," said Harry Bosco, group president of the Optical Network Group at Lucent. The company plans to open four more research and development centers and more manufacturing facilities, not just to create products for China but to serve markets around the world, he said.

"We think it's good business because of the talent pool that's in China," Bosco said.

Officials said in January that CITIC Pacific, the Hong Kong-listed arm of China International Trust and Investment Corp., based in Beijing, would turn to CITIC Beijing to arrange with China-based companies to operate the network.

Foreign-owned firms currently are not allowed to compete in China's carrier business, although this rule is expected to be relaxed upon China's accession to the WTO. [See "CITIC Pacific Lines Up China Investments," Jan. 7.] CITIC Pacific officials declined to discuss who will operate the network after it is completed.

CITIC Pacific, in Hong Kong, can be reached at +852-2820-2111 or online at http://www.citicpacific.com. Lucent, in Murray Hill, New Jersey, can be reached at +1-908-582-5800 or online at http://www.lucent.com.

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