18 February 2019

Navigating firms around China’s internet logjam

China aims to make broadband widely available by 2020, but until then businesses must look for other IT solutions to support business growth online. And that’s where CITIC Telecom International’s (01883.HK) subsidiary, CPC has gained an edge.

The company offers services and hardware to help firms find the right internet service provider and build systems so that companies like US footwear maker Deckers Outdoor Corporation can speed up and better manage network traffic flow.

Deckers, which markets a series of well-known international footwear brands, like UGG, Teva and Sanuk, used CPC to connect its 37 retail stores and offices across China to sharpen inventory management.

Francis Guillen, Deckers’ regional head of IT solutions delivery, said internet connections in second- and third-tier cities are poor and not stable enough to run the company’s applications over the web.

“We had to choose a more stable and reliable connection which gives us better reliability and security for our apps,” Guillen said. 

Ivan Tang, senior vice president of sales department in CITIC Telecom CPC, said the key was CPC’s database on pricing and availability of local internet loop resources across China.

When customers like Deckers need a higher quality network, CPC sifts through its database to find the best option within the budget, saving the client the ordeal of dealing with numerous service providers with confusing charging schemes.

CPC also provides cloud services, including disaster recovery. It set up its cloud service center in Beijing in March and has six other centers across the Asia-Pacific region to supply backup and synchronizing support.

CPC’s strategy of focusing on providing network and cloud solutions to businesses has paid off. In the first half of this year, CPC recorded a profit of HK$121 million (US$ 15.6 million), a 30 percent year-on-year increase. The company’s contribution to the group’s overall profit climbed to 58 percent in the same period, up from 32 percent last year. 

The strategic shift also helped offset a profit slump in CITIC Telecom’s other telecom businesses, which have been battered by the popularity of over-the-top applications, services that bypass traditional telecommunications providers to supply products over the internet.

– Contact the writer at [email protected]



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