Hong Kong-based telecommunications operator Asia Netcom (Booth 125), is readying a major push into the North American market with connectivity solutions for U.S. corporations to leverage cost savings available in the world’s fastest growing region.
Founded in March 2003 by a consortium led by China Netcom (CNC), the ownership structure of Asia Netcom recently changed when CNC acquired 100 percent of the company. With the backing of China Netcom, Asia Netcom aims to use its pan-Asian network infrastructure, including a state-of-the-art submarine and terrestrial cable system connecting six major Asian markets, to become the preferred conduit of U.S. companies’ plans to outsource business operations to low-cost centers in the Asia Pacific region.
"An increasing number of companies in the U.S. are taking advantage of cost savings and IT talents in key Asian markets, much like American manufacturers did in accessing low-cost labor in the East in the past three decades," says Bill Barney, president and chief operating officer of Asia Netcom. "In view of this trend, we have focused our strategy on extending our capabilities to cover the key markets, India and China."
With India now marketing itself as the back-office-of-the-world, and China gaining strength as a provider of outsourcing services, analysts estimate that the revenue in software and computer services from these two markets exceeded a combined $15 billion last year. By 2007, each of these two markets will be providing services worth in excess of $27 billion, or a total revenue base of more than $50 billion.
Much of that revenue in India come from call centers for U.S. firms catering to American or international customers. China, meanwhile, now caters to major firms in the Chinese language territories of Taiwan and Hong Kong, and is increasingly supplementing its capabilities with Japanese, Korean and English support.
All of these initiatives require connectivity, and it comes as no wonder that the new acronym, BPO, or business process outsourcing, is now the buzz word for the Asian telecommunications sector and foremost in the minds of Barney and his peers.
"In the past year, we have adopted a companywide and product-specific strategy to address the requirements of the BPO," he says. "We looked at the specific requirements — on the network level as well as on the application level — that need to be in place to support the BPO sector, and developed what we think is a winning combination."
Asia Netcom’s network is interconnected with the nationwide fiber network of China Netcom and the company signed a strategic partnership with Indian powerhouse, VSNL, enabling its offer of seamless connectivity into these two markets.
Asia Netcom also has in place an Asia-wide MPLS infrastructure that allowed the company to roll out the region’s first IP VPN offering that featured 5 Class-of-Service. "This means our customers can migrate all their application traffic, including voice — an important component of any call center –video, or plain data onto a single, flexibly priced network," says Barney. "We also strengthen our business capabilities with unique value-propositions for BPO providers, such as the option for usage-based on IP VPN, which means that our customers can now opt to pay for only the bandwidth they use. For call centers, which typically record heavy traffic loads during a particular period of a day, for example, during U.S. working hours, this could equal significant cost savings as well as performance advantages since our customers can access more bandwidth when traffic loads are high."
While Asia Netcom does not have its own network in these two markets, the company works through strategic partnerships. In India, it has signed a partnership deal with the country’s largest ISP, Nasdaq-listed Sify, which has built its own MPLS-powered IP VPN infrastructure in the sub-continent, allowing Asia Netcom to extend its 5 Class-of-Service offering all the way to major Indian cities. Asia Netcom now is working to achieve the same capability in China by interconnecting its MPLS platform with the one built by China Netcom, an initiative slated for completion later this year.
Additionally, Asia Netcom is working to bring online an extensive regional VoIP platform that will give BPO customers further cost-efficiencies on its voice traffic. "We know where our strengths are, and that is in having one of the most robust and reliable networks in Asia," Barney says. "That is our focus as a company and that is what drives our business direction — to be the preferred telecom service provider for corporations with operations in Asia."