In November, we signed a network connection contract with China Unicom. This is not a random event. Communication with Asia is a symbol of the rapidly changing global economy landscape. Owing to such contracts, Poland has the chance to play a significant role in this scenario.
Business for the agile
There are two basic business types that European telecommunications operators conduct in Asia. These are data transit and wholesale voice call transfer. The first one can be compared to transporting goods, and the second to stock exchange trading. In the case of the voice transport market, owing to modern technology and having own switching infrastructure, such as operator-class softswitches connected to a global IP network, one can really do business globally. It is possible to exchange voice telecom traffic with any other operator around the world. Therefore, it is not surprising that EXATEL, a Polish digital operator, provides voice services, e.g., to residents of Vietnam or China. This industry needs both technological skills, as well as extraordinary business agility – both are required in negotiating and working with Far Eastern partners. This requires having business skills but the workload pays off. It is worth being in China and its region, and to establish cooperation with local businesses – which are increasingly boldly looking for investment opportunities in Europe.
Asia is developing
The Asian telecommunications market is growing. The dynamic increase in the demand for communication means that all global players are striving to enter this market with their services – from top-tier – to local operators. However, not everyone succeeds, as it is a globalized market. Its participants must have significant funds and a global infrastructure at their disposal.
This is why concluding the connection agreement between EXATEL and China Unicom is an important event for Polish business. Now, EXATEL has connections with all key Chinese operators. And accomplishing this proves that Poland can establish business fruitful partnerships in very competitive markets. This cooperation opens new Eastern markets to EXATEL, as through it we have gained excellent negotiating positions in talks with operators from all over Asia – from Pakistan to Korea.
“We have concluded contracts with the largest players in the region and have striven to attract as many partners as possible. This is an outcome of many years of work, forging paths, building relationships and agreements. Our experience shows that the development of the telecommunications market is closely correlated with economic growth. Countries that we used to call “developing” are becoming “developed”, thus generating business opportunities that, unlike the “old markets”, are still far from being saturated. By observing global trends, we learnt how to shape business strategies, tailoring them to various regions. China is a very important market to us and I am glad that we were able to embed our business presence therein” – Andrzej Szczerba, director of the Voice Wholesale Department
Communication Silk Road
Communications routes between Europe and Asia are the most rapidly developing section of the telecommunications market. Due to the relative late opening of Central-Asian countries to large commercial operators, local operators and consortia play a greater role.
The number of fibre-optic lines on various routes. In 2016, the direct Asia-Europe connection was a global bottleneck. Despite the economic boom in China, India and other Asian countries, most traffic was routed through the US and through a transatlantic connection (data source: telegeography.com).
Europe is home to world’s largest data exchange points. The top seven points include six from Europe (counting the one in Moscow), and one from Asia – the Japanese JPNAP. This shows the geographical significance of Poland. Numerous enterprises, for example, that from the financial sector, need to be sure that the used connection is reliable. This is an opportunity for companies such as EXATEL, which have state-of-the-art technology and the resources to satisfy such demanding clients.
Growth engines
Modernization of the Chinese economy has become one of the main impulses for investing in telecommunications infrastructure in the region. The largest economy in the world also stimulates the ambitions and communication demands of its neighbours – Kazakhstan, Mongolia and India. Modern industry requires information as much as it needs raw materials and employees. According to Cisco data, 72500 Petabytes of data were transferred monthly in 2015, with this number increasing to 96000 Petabytes a year later. Please note that one Petabyte means 2000 years of MP3 music.
The last three years brought a huge change in the approach presented by Central and Eastern European countries towards China. This is evidenced by the expansion of Chinese business – the existence of numerous investment ventures and the interest in joint projects. The telecommunications industry is experiencing increasingly more such take-overs – such as the acquisition of the Dutch LinxTelecom by the Chinese CITIC holding company.
“The global economic situation leaves no illusions. The key players in the economic perspective are the USA and China. Polish business must actively participate in the East-West cooperation processes and the acquisition of new contracts. The expansion of Asian economies, and the fact that they go beyond their internal markets and invest globally is a chance for the Polish telecommunications market. Exatel is taking it. This is the best opportunity on offer for development in both the business, as well as technological spheres. We can expand our company, develop new solutions and build new infrastructure” – Damian Matyszewski, director of the Foreign Operators Department.
Polish opportunity
Poland is not located along the southern route – the traditional and most developed. Russia and Ukraine are doing much better in this case. However, it may become an important communications hub on the route leading through North Asia. Rapid, owned connections with Berlin or Frankfurt are a good solution for Asian operators, because the core principle in telecommunications is to strive for the greatest possible connection diversification. It is extremely important for Chinese partners that the solutions they are offered are stable and modern.
The sector of telecommunications and high technologies is rapidly becoming crucial to the entire economy.
The southern route is the collective name for fibre-optic cables laid primarily on the bottom of the Indian Ocean, Arabian Sea, Gulf of Aden, Red Sea, Gulf of Suez and the Mediterranean Sea. A typical line following this route is the SeaMeWe-3 fibre-optic cable – it connects Korea and Germany, with a branch to Australia. It is 39,000 km long Central land-based communication routes via, e.g., Kazakhstan, Russia, Azerbaijan, Georgia and Turkey are sometimes also included in the southern route.
