China expands cables

One of the largest Chinese operators providing traffic transmission services in the Russian Federation, China Telecom plans to expand its presence in the country, including increasing brand awareness. Kommersant’s interlocutors in the industry and experts believe that against the background of the disconnection of Russian operators from a number of Western traffic exchange points, China Telecom can expand channels for transit through Asia.

China Telecom is looking for a deputy general director of the Russian representative office, follows from a vacancy posted on March 14 on the LinkedIn portal. Responsibilities include increasing brand awareness in the market, developing a development strategy and “search for new opportunities to maximize corporate profits.” The top manager will also form and lead “a team to develop and implement the sales plan and business plan.” The telecommunalka Telegram channel was the first to notice the vacancy.

China Telecom was established in 2002 as a result of the restructuring of the State Telecom Corporation of China, serving 128 million subscribers. In Russia, it mainly provides cross-border traffic transmission services to local operators. In 2019, China Telecom opened an office in Vladivostok, saying it wants to expand its customer base in the B2O, corporate and government sectors, as well as develop projects in the smart city, Internet of Things, enterprise digitalization and traffic transit.

China Unicom (277 million subscribers in China, opened a representative office in Russia in June 2017) and China Mobile (867 million subscribers in Russia since 2018) also operate in the field of cross-border traffic transmission in Russia. Kommersant’s source in the market, who is familiar with China Telecom’s business, says that it “historically occupied a strong position in the B2O segment.”

In Rostelecom, Kommersant was told that they had been cooperating with China Telecom for more than 10 years and “the relationship is developing successfully.” Since 2006, Transtelecom has also been working with the Chinese operator: “Understanding the importance of the task of organizing data transit on the route through Europe, Russia, Mongolia, Kazakhstan and China, we are interested in expanding cooperation.” VimpelCom is also “developing all areas of interaction” with China Telecom, says Sergey Bykov, Vice President for Operator Business of the company: “The main focus is on the development of traffic transit in the Europe-Asia direction and the exchange of voice traffic between subscribers of communication networks.” Cooperation with China Telecom “on a range of issues of inter-operator interaction” was also confirmed in MegaFon. MTS did not answer “Kommersant”.

China Telecom sees growth opportunities in the Russian Federation, Alexey Slukin, the author of the Telekommunalka Telegram channel, believes: “For example, in terms of traffic transit, the throughput towards the EU is now many times greater than in the Asian direction.” In the corporate sector, most likely, we are talking about Private LTE projects for large enterprises, the expert believes.

Kommersant’s interlocutor in the telecom market believes that China Telecom will expand cross-border traffic transmission: “This is especially true against the background of the disconnection of Russian operators from Western traffic exchange points.” However, such examples are rare so far. In particular, London Internet Exchange disconnected Rostelecom and MegaFon from its services back in the spring of 2022 (see Kommersant dated March 13, 2022). After that, the head of the Ministry of Digital Development, Maksut Shadayev, said that “in the event of a complete shutdown of Russian operators in Europe from traffic exchange points, it is planned to redirect it through Asia.” Rostelecom is engaged in the construction of the Europe-Asia Transit (TEA NEXT) backbone communication line, but it is planned to complete it only in 2025-2050. The operator announced the creation of the first stage of the line connecting Idritsa in the Pskov region and Torzhok in the Tver region only in December.

Julia Silence