China Netcom Corp officially entered Shanghai's fixed-line phone market by targeting high-end customers yesterday and in the process further broke the almost 50-year monopoly of Shanghai Telecom.

Shanghai Netcom, the local branch of China's second-biggest telecom operator, actually promoted its fixed-line phone business in Shanghai last month, becoming the third local fixed-line operator to provide services for family and business users.

Before Shanghai Netcom's move, Shanghai Telecom occupied more than 98 percent of the market, while China Railcom took only about 1 percent after two years' of operation in the market.

"A strong backbone network constructed earlier across the country guaranteed that we have ability to provide high-quality services, especially for company clients," said Zhou Renjie, general manager of Shanghai Netcom.

Until now, Shanghai Netcom has provided fiber access service to some 300 companies in the business districts, including Wenxin United Press Tower which houses both Shanghai Netcom and Shanghai Daily. On average, 30 percent of the offices in these buildings choose to use Netcom's fixed-line phone service.

Gu Xianli, an analyst of Analysys Consulting Co Ltd, also said that Shanghai Netcom does not need to spend a lot to add voice services onto their well-established network, which formerly provided only data services.

"Most of Netcom's customers are high-end users, who can bring profit to Shanghai Netcom not only from voice business. They might also use the company's data and video services in the future," he said.

"But in my opinion it will still take a long time for Shanghai Netcom to make money from its household fixed-line service," Gu said.

(Shanghai Daily September 2, 2003)