WTO entry to improve Internet access in China

China's accession to the World Trade Organization (WTO), which could happen by November, is expected to bring about an increase in international bandwidth that will offer substantial improvements in Internet connectivity for Chinese users, said Regis Kwong, chief executive officer (CEO) and president of Terremark Asia Co. Ltd, speaking at the CeBIT Asia exhibition here.

When China opens its telecommunication market to foreign competition under the terms of its WTO membership, foreign carriers will bring a rush of additional bandwidth, including international connections up to 40G bps (bits per second) each, with them into the market, Kwong said.

This flood of additional bandwidth will improve the quality of Internet connectivity for Chinese users, he said.

In the first year after China joins WTO, foreign carriers will be limited to a 25-percent equity stake in any company providing basic telecommunication services in China, Kwong said, adding that the restriction will be eased gradually over time and could be reduced faster than expected.

"It (easing of access for foreign carriers) could go faster than agreed for WTO," Kwong said.

To handle this extra capacity and an increase in traffic, China is expected to need several tier-one, or international, network access points (NAPs) where traffic can be exchanged between major carriers, Kwong said. China currently has three domestic, tier-two NAPs, located in Beijing, Shanghai and Guangzhou, that are operated by China's Ministry of Information Industry (MII), which acts as a neutral party to manage the NAPs, he said.

The MII has also recently given approval for a fourth tier-two NAP to be built in Chengdu, Sichuan province, to improve the quality of Internet access in China's less-developed western provinces, he said.

The first tier-one NAP in China is expected to be built in Hong Kong, which is ranks as the ninth-largest concentration of network bandwidth in the world. Terremark, which runs a tier-one NAP in Miami called NAP of the Americas, is in the process of assembling a consortium of carriers to construct the Hong Kong NAP, Kwong said. The Hong Kong NAP is expected to be in operation within one year, he said.

Further down the road, the Shanghai NAP is likely to be upgraded from a tier-two NAP to a tier-one NAP, Kwong said.

"Shanghai is not very economical at this time," Kwong said, citing a shortage of trained managers, difficulty in getting access to telecommunication facilities and a lack of openness.

In the long run, however, Shanghai's proximity to the ocean puts it in a good position to become the first tier-one NAP in mainland China, he said.

CeBIT Asia runs through Saturday.

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