AsiaInfo (Nasdaq: ASIA) CEO James Ding said Thursday he was confident about his company's prospects following two recent deals to broaden its reach in China.
AsiaInfo, which provides Internet infrastructure software and services in China, reports earnings April 19. The Beijing-based company made its market debut earlier this month priced at $24. Shares are up 170 percent from the AsiaInfo's initial public offering, when the stock soared 342 percent. In afternoon trading, AsiaInfo was off 4 13/16 to 65 3/16.
The company, which built China's first Internet backbone in 1995, said Wednesday that it would provide software for the country's second and third national Internet backbones.
Under a deal with China United Telecommunications Corp., or China Unicom, the second-largest national telecommunications operator in China, AsiaInfo will build UniNET. UniNET is expected to have the largest number of nodes among China's national Internet backbones, and will use advanced IP over ATM technology to cover 138 major cities throughout China. China Unicom will use AsiaInfo's customer management and billing software AIOBS for UniNET's pre-paid Internet service.
The company also announced terms of its contract with China Netcom (CNC) to build China's first nationwide IP over DWDM, or Dense Wavelength-Division, broadband Internet backbone, CNCNet. CNCNet will provide bandwidth of up to 40Gbps. CNCNet will also use AsiaInfo's AIOBS software.
The pacts follow a positive Wall Street mention on Tuesday. Morgan Stanley, an underwriter for the AsiaInfo IPO, started coverage on the stock at "outperform."
Ding said the backbone pacts will help alleviate Internet congestion and bring costs down as China's Internet population booms.
On other topics, Ding had the following to say in an interview with ZDNet Inter@ctive Investor:
Ding added that investment is growing in China because of government spending and increased venture capital interest. China will have about 33 million Netizens by 2004, according to analysts.
The company will also acquire local companies in China, and consider strategic purchases of U.S.-based companies.
As for regulation on outside investment and content, Ding said the government will eventually cede policy control. "The government recognizes the importance of the Internet to the economy," said Ding. "They can't put too tight of control on the Internet. Most of the policies affect content providers, but the government will eventually lose policy control."