China’s CITIC plans global telecoms expansion

By:
Alan Burkitt-Gray
Published on:

Chinese-owned CITIC Telecom plans global expansion after buying Linx Telecommunication

A carrier owned by China’s vast state investment company has started on its plan to expand through central Asia, Russia and Europe. The company, CITIC Telecom CPC, is aiming for more than 140 points of presence (PoPs) in 130 countries, CEO Stephen Ho told Global Telecoms Business.

The CITIC holding company – formerly the China International Trust Investment Corporation – is China’s major investor in assets at home at round the world. Set up in 1979, it now invests in 56 businesses.

This year its carrier business, CITIC Telecom CPC, bought a European company, Linx Telecommunication, and that is now being integrated into the operation.

“Linx is headquartered in Amsterdam but has operations in central Asia, eastern Europe, and offices in places such as Warsaw and Moscow,” said Ho, speaking at this week’s Capacity Europe event. Before the deal, CITIC Telecom CPC had PoPs only in Frankfurt and London.

“We’ve renamed the company CITIC Telecom CPC Europe,” he added – though most people will call it CPC Europe, he suggested.

“CITIC Telecom CPC started with the mission of connecting the world to China,” said Ho. Now, with the addition of Linx, it will also be able to connect enterprises across the world. “We have 12,000 customer sites, mostly multinational corporations and enterprises,” he said.

CITIC Telecom CPC’s expansion strategy fits well with the Chinese government’s Digital Silk Road policy, also known as One Belt, One Road, by which it is building links through central Asia and Europe.

“We want to encourage enterprises to invest outside China. This has opened up immense opportunities for investments for us to serve these enterprises. Originally we were connecting the world to China but now we are going the other way as well.”

CITIC Telecom CPC is an asset-light company that is using local facilities to connect customers, said Ho. The telecoms company is based in Hong Kong.

The acquisition deal was completed only in February 2017 after bankers representing Linx Telecommunication approached Ho. Now he wants to build up the operation as a seamless international network. “We can already implement NFV on our network,” he said. “We will be adding capability to serve our customers.”

The company’s “niche is really cloud computing, but around the world”, he said. “We also offer professional services and integration services. We will be introducing SD WAN [software defined wide-area networks] across the network. We already have in our part of the world and we will introduce it to this part of the world [Europe] soon.”

New connections are “under investigation”, though Ho was unwilling to go into details. However he admits to being guided by China’s investment projects in Africa and South America. “We are driven a lot by the outbound investment plans of China,” he said.