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Cisco Helps China Unicom Sichuan Deliver Converged
Voice, Video, and Data
China represents perhaps the largest market for telecom services in the world. For many
years, China Telecom was the only service provider in the country, but in 1994, a second
service provider—China United Telecommunications (China Unicom)—was established,
marking the beginning of telecom reform in China. China Unicom is now the country’s only
full-service provider offering fixed-line, mobile, and Internet connectivity, long-distance, and
video conferencing services.
To successfully compete against the well-established incumbent, however, China Unicom
understood that it had to differentiate itself and its services. China Telecom already had the
world’s largest public switched telephone network (PSTN). If China Unicom were to build a
similar PSTN network, it would have to compete solely on price with its much larger rival:
a daunting task. Instead, China Unicom saw IP as the key differentiator that would give the
newcomer the ability to offer enhanced features and economical bundled services.
China Unicom opted to build an IP infrastructure, one that would allow the company to
deliver high-speed Internet access and data services to its customers, and to use that data
network to offer voice services as well. When measured in terms of volume of voice traffic,
the resulting voice over IP network that China Unicom created is the largest in the world.
China Unicom Sichuan, a division of China Unicom located in China’s Sichuan Province,
markets its bundled data, voice, and video services primarily to small and medium-sized
(SMB) businesses that need an average of 100 phone lines.
As early as 1998, China Unicom Sichuan’s General Manager Tong Xiao-Yu recognized the
potential of Cisco’s Multiprotocol Label Switching (MPLS) technology to support multiple