China Netcom

China Netcom was a major Chinese telecommunications operator focused primarily on fixed-line communications, broadband Internet access, data networking, and related connectivity services. Established by the Chinese government in August 1999, it was initially intended to expand high-speed Internet infrastructure and create a vehicle through which investment could support the development of China's communications networks. The business began as a wholesaler and operator of high-speed data networks, with its early headquarters in Shanghai, but its initial commercial position was difficult because China Telecommunications Corporation, commonly known as China Telecom, retained a dominant position in the fixed-line market. The company's fortunes changed as the Chinese government reorganized the telecommunications sector and broke up elements of China Telecom's former monopoly. China Netcom received a substantial allocation of fixed-line assets, much of it concentrated in northern provinces. This made it the principal fixed-line challenger to China Telecom in mainland China and gave it a strong operating base in Beijing, Tianjin, Hebei, Henan, Shandong, Liaoning, and other northern markets. Although the company was initially more regionally concentrated, its network and service footprint later extended into most provinces. China Netcom's core business included traditional wire-line telephony, broadband Internet access, high-speed data transmission, Internet backbone capacity, and Internet colocation. It supplied ADSL services where its network was available and was an important connectivity provider for commercial Internet and IP-telephony outlets. The company also operated a semi-mobile Personal Handy-phone System service, commonly known in China as Xiaolingtong or PAS. This service occupied an intermediate position between fixed-line and mobile communications, using wireless access associated with the fixed network. Network expansion and reliability were central to the brand's public role. China Netcom developed a broadband backbone intended to carry traffic across the country and supported connectivity for business customers, Internet service providers, and public-facing telecommunications outlets. Its regional strength in northern China complemented its later national reach. The company was also appointed the official telecommunications operator and partner for the Beijing 2008 Olympic Games. In that capacity, it provided fixed-line telecommunications services to the Beijing Organizing Committee for the Olympic Games and supported the test events, the Olympic Games, and the Paralympic Games. China Netcom remained a publicly traded telecommunications group for part of its existence. In June 2008, it announced plans to combine with China Unicom after China Unicom transferred its CDMA network to China Telecom. The transaction brought China Netcom's fixed-line and broadband assets together with China Unicom's nationwide GSM business and its own Internet-access operations. The merger was completed on October 6, 2008. China Netcom became a wholly owned subsidiary of the reorganized China Unicom, and its Hong Kong and New York listings were withdrawn. The China Netcom brand therefore ceased to operate as an independent listed telecommunications company, although many of its networks, assets, customers, and services became part of China Unicom's continuing business. The company also attracted negative attention from overseas anti-spam organizations. Researchers and anti-spam monitors associated the domain cnc-noc.net and parts of the wider network with spam and websites promoted through unsolicited email. These reports criticized the operator's response to incident notifications. Such allegations concerned network-abuse management rather than the company's core telecommunications products, but they became part of the public record surrounding China Netcom before its absorption into China Unicom.

China Netcom was created in August 1999 by the Chinese government to help develop high-speed Internet communications and facilitate investment in national network infrastructure. The company's early business was centered on wholesaling high-speed data-network capacity. It was headquartered in Shanghai during its initial phase and entered a market in which China Telecommunications Corporation, or China Telecom, had a powerful fixed-line position. This competitive environment made the original business model difficult to sustain and reportedly brought the company close to failure. A major turning point came through the restructuring of China's telecommunications sector. The government dismantled aspects of China Telecom's former monopoly and allocated a portion of its fixed-line assets to China Netcom. Most of the transferred infrastructure was in northern China, giving the company a substantial base in provinces and metropolitan areas including Beijing, Tianjin, Hebei, Henan, Shandong, and Liaoning. China Netcom subsequently became widely regarded as the leading fixed-line competitor to China Telecom. Its operations later expanded beyond the northern core and reached most provinces in China. The company's principal activities were wire-line telecommunications and data communications. It operated fixed-line voice networks, offered ADSL broadband where infrastructure permitted, and built a broadband Internet backbone intended to carry traffic across the country. It also supplied Internet colocation and connectivity services and was an important network provider for businesses and the walk-in IP-telephony shops that offered lower-cost telephone calls. In addition, China Netcom operated a semi-mobile PAS service, known in China as Xiaolingtong. This wireless-local-loop platform extended the utility of the fixed network without making the company a conventional nationwide mobile operator. China Netcom's network role became especially visible during the preparation for the Beijing 2008 Olympic Games. It was selected as the official telecommunications operator and partner for the event and provided fixed-line services to the Beijing Organizing Committee for the Olympic Games. The operator also supported the Good Luck Beijing test events, the Olympic Games, and the Paralympic Games. Network stability and service continuity were important parts of its public responsibilities during these events. The company operated as a publicly traded telecommunications group before its disappearance as an independent corporate and stock-market identity. On June 2, 2008, it announced a proposed merger with China Unicom. The transaction followed China Unicom's sale of its CDMA network to China Telecom and was designed to combine China Netcom's fixed-line, broadband, and data assets with China Unicom's nationwide GSM network and its smaller dial-up and ADSL Internet businesses. The merger was completed on October 6, 2008. China Netcom became a wholly owned subsidiary of China Unicom, and its Hong Kong Stock Exchange shares and New York Stock Exchange American depositary receipts were withdrawn. Before the merger, China Netcom also faced criticism from overseas anti-spam researchers. Reports connected the cnc-noc.net domain and portions of the network with unsolicited email and websites promoted through spam, including sites associated with pharmaceuticals, adult content, and gambling. Researchers criticized the operator for allegedly failing to respond adequately to abuse reports. These incidents affected the company's external reputation, although they were separate from its core fixed-line, broadband, and Olympic telecommunications activities. After the 2008 merger, China Netcom ceased to exist as an independent operating brand and became part of China Unicom's corporate and network structure.

1. 2008Beijing Olympic telecommunications partnership

   China Netcom served as official telecommunications operator and partner for the Beijing Olympic and Paralympic Games and their test events.

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2. 2008Merger plan with China Unicom is announced

   China Netcom announced its intention to merge with China Unicom after China Unicom transferred its CDMA network to China Telecom.

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3. 2008China Netcom becomes part of China Unicom

   The merger was completed on October 6, making China Netcom a wholly owned subsidiary of China Unicom and ending its independent stock listings.

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4. 2000Fixed-line assets are allocated during telecommunications restructuring

   As the Chinese government reorganized China Telecom's former monopoly, China Netcom received a significant package of fixed-line assets, particularly in northern provinces.

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5. 1999China Netcom is established

   The Chinese government formed China Netcom in August 1999 to support high-speed Internet communications and infrastructure investment.

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6. 1999Early high-speed data-network business begins

   The company began as a wholesaler and operator of high-speed data networks, initially operating from Shanghai.

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A government-established fixed-line and broadband challenger to China Telecom, with a particularly strong operating base in northern China and a later nationwide connectivity footprint.

• Fixed-line voice servicesFixed telecommunications

  China Netcom's traditional network business provided fixed-line telephone services, especially in northern Chinese provinces and major cities. These services formed the infrastructure base for the company's broader broadband, enterprise-connectivity, and public telecommunications activities.

• ADSL broadbandConsumer broadband

  The company offered ADSL Internet access in areas covered by its fixed-line network. Availability was strongest in its northern operating markets, while later network expansion gave the business a presence across a wider portion of mainland China.

• Broadband Internet backboneNetwork infrastructure1999

  China Netcom built and operated high-speed data infrastructure intended to carry Internet traffic across China. The backbone supported its retail broadband customers as well as enterprise, wholesale, ISP, and other connectivity users.

• Internet colocation and data connectivityEnterprise telecommunications

  China Netcom supplied colocation and related connectivity services for organizations requiring access to telecommunications and Internet infrastructure. It also supported commercial IP-telephone outlets and other customers dependent on reliable data links.

• Xiaolingtong/PASWireless-local-loop telecommunications

  The PAS, or Xiaolingtong, service was a semi-mobile communications system associated with the fixed-line network. It gave subscribers limited mobility while using China Netcom's fixed telecommunications infrastructure, occupying a position between conventional fixed-line service and full mobile telephony.

• 2008Beijing 2008 Olympic telecommunications partnership

  China · Beijing

  China Netcom acted as the official telecommunications operator and partner for the Beijing Olympic Games. It provided fixed-line services for the Olympic organizing committee and supported the Good Luck Beijing test events, the Olympic Games, and the Paralympic Games.

  Outcome. The company completed its telecommunications role during the events and used the assignment to demonstrate the stability and reach of its fixed-line network.

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• 2008Approve merger with China UnicomM&A

  The Chinese telecommunications sector was being reorganized, and China Unicom had sold its CDMA network to China Telecom. A combination with China Netcom would bring together China Netcom's fixed-line and broadband assets with China Unicom's GSM network and Internet-service businesses.

  What changed. China Netcom announced the merger on June 2, 2008. The transaction was completed on October 6, 2008, when China Netcom became a wholly owned subsidiary of China Unicom.

  Aftermath. China Netcom ceased to operate as an independent listed company. Its Hong Kong and New York listings were withdrawn, and its assets and operations were incorporated into China Unicom.

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• 2008Criticism over spam and network-abuse handlingControversy

  Overseas researchers and anti-spam organizations associated the cnc-noc.net domain and parts of China Netcom's network with spam and spam-promoted websites. Reports criticized the operator for allegedly failing to respond to incident reports. The allegations concerned abuse management and network reputation rather than the company's primary telecommunications services.

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• 2008China Netcom announces planned merger with China Unicom

  China Netcom announced its intention to merge with China Unicom following China Unicom's transfer of its CDMA network to China Telecom. The planned combination would unite China Netcom's fixed-line and broadband assets with China Unicom's GSM and Internet-service businesses.

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• 2008China Netcom merger with China Unicom is completed

  The merger was completed on October 6, 2008. China Netcom became a wholly owned subsidiary of China Unicom, while its Hong Kong and New York securities listings were withdrawn.

  M&ALeadership change
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• 2008China Netcom serves as official telecommunications operator for the Beijing 2008 Olympic Games

  The company provided fixed-line telecommunications services for the Beijing Olympic organizing committee and supported network operations during test events, the Olympic Games, and the Paralympic Games.

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1. China Netcom