By JONAH GREENBERG
(Virtual
China News, June 21) Redback Networks (ticker: RBAK), a highly
specialized producer of Internet customer management hardware, will
continue its foray into China's red-hot broadband Internet market by
teaming up with AsiaInfo (ticker: ASIA), China's leading systems
integrator.
The Sunnyvale, Calif.-based company will integrate its
customer management product with AsiaInfo's billing software and offer
Internet access providers and wireless carriers a way to monitor and
control their subscribers' use of the Internet, according to a joint
statement Tuesday.
The two companies hope to be early-birds in the broadband arena in China, where less than ten percent of Internet
users have a high-speed connection.
"We believe there is a very strong,
synergistic fit between our two companies," said David Ko, a Redback
spokesman, in an e-mail from the company's regional headquarters in
Singapore.
Increasing Demand
Ko pointed out that AsiaInfo has been involved in much of the
systems integration work to date in building up China's current Internet
infrastructure. AsiaInfo was contracted in 1994 by China Telecom to
design and build ChinaNET, the country's first and largest national
backbone network.
AsiaInfo will customize its AsiaInfo Online Billing
System (AIOBS) proprietary software to be used together with Redback's
highly specialized form of Internet hardware called Subscriber
Management System (SMS), which controls and monitors user access to
various content offerings over the Internet.
Redback believes this type of product will see increasing demand in China and elsewhere, as broadband service
providers seek to charge subscribers at terraced rates based on the
quality and variety of their access to multimedia information.
"There
are very few other providers of the technology," said Barry Sine, an
Internet infrastructure analyst at Kaufman Brothers. "Those that are out
there don't have the market penetration," he said, adding that he
estimates Redback to have 80 percent of the market share for their
product niche.
Rich Content
"When you've got large numbers of users accessing the
Internet you need some type of device managing their access to the
backbone," Sine said.
Telecommunications carriers in China who plan to
use their data networks to offer broadband Internet service, such as
China Telecom, China Unicom, and China Netcom, will need tools to manage
the various degrees of access they offer their subscribers, especially
if they begin to offer premium content packages in partnership with
content providers.
Increasingly, broadband Internet service providers
will seek to offer subscribers rich content that they would otherwise
not have access to over the public Internet.
"Now that they've given their subscribers access to the Internet, they might want to give them access to 50 channels to streaming music," Sine said.
Redback and AsiaInfo plan to market their joint products as facilitators of
wireless Internet service, which is expected to surpass fixed-line
connections as the leading form of Internet access in China.
Infrastructure Buildout
Redback hopes that its suite of customer management hardware and software
will be welcomed in a market where wireless operators,
Internet service providers (ISP's), and Internet content providers
(ICP's) carry on in uneasy alliances, still unable to determine a viable
way to charge for wireless Internet service after months of commercial
trials.
Through "wireless application protocol" (WAP) technology,
Internet content can be delivered into cellular subscribers' cell phones
or other wireless devices.
Redback's David Ko said sales are picking up
around the world, with 200 telecommunications companies using their SMS
products for distributing broadband Internet content.
"We believe this
trend will continue in China and other parts of Asia," he said. "China,
with its massive infrastructure buildout, especially in cable, will make
up a major portion of that growth."
RBAK Shares
Beginning in March of this
year, Guangdong Telecom began using Redback's SMS product to manage
their high-speed Internet service in ten cities in southern China.
Redback has offices in eight locations in Asia Pacific, including Japan,
Hong Kong, Singapore, Thailand, and Australia; they also have offices
throughout the U.S., Canada, and Western Europe.
RBAK shares were up
almost one percent on the news after a dip in early selling, closing at
137 9/16. AsiaInfo's shares also rose nearly one percent to close
at 44 15/16.
To reach Jonah Greenberg email: jgreenberg@virtualchina.com
