Move to help drive up profits as growth slows in network sector

China Unicom (Hong Kong) Ltd, the nation's second-biggest telecom operator by subscriber numbers, announced on Thursday it had started offering cloud-based services to enterprise customers, a move that will help diversify its revenue sources.

The company is the first Chinese telecom carrier to start commercial operations of cloud-computing technology.

It is joining a global trend, as more telecom operators want to overcome their flat growth in the traditional network business and are seeking innovative, new business models.

China Unicom aims to become a supplier of cloud resources, an operator of enterprises' private clouds, and play a role in developing industry cloud applications, the company said at a Beijing news briefing on Thursday.

Enterprise customers can lease cloud servers and storage, establish their own private clouds, test applications on clouds, or purchase integrated cloud security packages from China Unicom, said Tian Wenke, general manager of the company's enterprise customer business department.

"The services aim to lower enterprises' costs, since they have no need to buy bulky hardware and establish a system on their own. In addition, they will be more flexible and free as they can order services on demand," Tian added.

China Unicom opened a website - Cloud.10010.com -to attract customers to its new service.

Jiang Zhengxin, deputy general manager of China United Network Communications Group Co Ltd, the parent company of China Unicom, said the cloud-based service would be one of the major businesses for China Unicom in the future.

"If we look globally, the cloud-computing business is gradually becoming a reality. Introducing the cloud service is an important step in China Unicom's transformation," Jiang said.

The mobile and fixed-line broadband businesses remain China Unicom's major revenue sources. The company is the fastest-growing carrier in China in terms of third-generation wireless business. Last year, it had 40 million 3G service subscribers and gained 33.8 billion yuan ($5.34 billion) in 3G sales.

China Unicom aims to have 90 million 3G users and 70 billion yuan in 3G revenue by the end of the year, Shao Guanglu, deputy general manager of China Unicom, said in an interview earlier this month.

China Mobile Ltd and China Telecom Corp Ltd, the other two Chinese telecom carriers, are also actively participating in the cloud-based competition.

China Mobile, the biggest telecom carrier in China, started research and development of cloud computing technology in 2007. It invested 12 billion yuan last November to build China's biggest data center in the Inner Mongolia autonomous region.

He Baohong, secretary-general of the cloud-computing development and policy forum at the China Academy of Telecommunication Research, said there are natural advantages for telecom operators that develop cloud-computing services.

"Telecom operators have network resources and are in charge of Internet connections. Meanwhile, they are experienced with providing services to the public and charging on demand," He said.

Major global carriers, such as Verizon and AT&T, have all regarded cloud-based services as a key strategic business unit.

AT&T invested $1 billion last year to provide cloud solutions on a global network basis to enterprise users.

The global cloud-computing service market is expected to reach a volume of $107.2 billion this year, according to a Gartner report. The United States was the world's biggest cloud-based service market, with a market share of 58 percent in 2011, while China had 4.7 percent in the same period.

shenjingting@chinadaily.com.cn