Telecom Lead Asia: Pacnet is planning to expand its IP VPN services in China.
It will target large customers including carriers and multinational enterprises that offer e-commerce and telecommunications services.
Recently, Pacnet Business Solutions (China), Pacnet’s joint venture in China, has received an enhanced value-added service license from China’s Ministry of Industry and Information Technology.
The license expands PBS’s IP VPN coverage from 20 cities to 23 provinces.
The license allows PBS to continue to operate Internet data centers in five cities and provide Internet access in 10 cities. Pacnet will connect its IP VPN service to these data centers, providing a platform to offer enhanced managed services and cloud-based services.
The expanded network gives PBS’s clients the ability to reach a greater swath of customers in China and manage their businesses with Renminbi-denominated accounts.
“China now has the world’s largest Internet population and it continues to grow rapidly, requiring a need for accelerated infrastructure growth to meet the increased appetite for connectivity,” said Carl Grivner, chief executive officer, Pacnet.
“Our expansion plan positions Pacnet to capitalize on China’s robust growth by broadening the reach of our connectivity solutions around the country as corporations continue to expand their businesses across China,” Grivner added.
Domestic Chinese companies, such as the incumbent telecommunications service providers, comprise roughly 50 percent of PBS’s clients. Global multinational corporations account for the remaining half.
According to Frost & Sullivan, the domestic IP VPN market in China is forecast to grow from $974 million in 2012 to over $2.5 billion by 2017.
“We believe the expansion of our network and capabilities further cements our role as the premier gateway into Asia’s largest market, and one of the fastest growing telecommunications and e-commerce markets worldwide,” said Henry Lam, general manager of Pacnet Business Solutions (China).
According to a recent telecom news report in TelecomLead.com, Pacnet will cut 30 percent of its workforce. The reduction in resources will enable Pacnet to lower annual expenses by approximately $30 million. The company will also divest nonviable businesses. It will also exit commoditized businesses such as the residential internet service and wholesale voice segments.