A memorandum of understanding between Alcatel Shanghai Bell (ASB) and Shanda Networking Co Ltd, China's leading online game operator, to jointly develop integrated broadband solutions for telecom service providers, was confirmed Thursday.

"The cooperation with Shanda represents a significant step along the way to our goal of helping service providers deliver broadband services through innovative partnership," said Gerard Dega, president of ASB.

The first of its kind in China, the partnership was established to drive the development of broadband entertainment services in the fast-growing broadband market, he said.

Under the the agreement, ASB will combine its market-leading digital subscriber line (DSL) solution with Shanda's latest online gaming suite to deliver a total broadband offering to telecom service operators in China.

ASB will also provide consultacy to telecom service providers in marketing gaming applications to end-users.

"The fast growth of broadband subscribers in China presents huge opportunities for service providers," he said.

"ASB, with its leading position in the DSL market in China, is committed to partnering with major industry players to provide technically and economically viable broadband solutions to our customers."

According to predictions from the Ministry of Information Industry, the country's telecom watchdog, China's broadband marketis expected to exceed 20 million subscribers by the end of this year.

"Telecom service providers will also be able to generate new sources of revenue and increase market share, while meeting increasing end-user demand for broadband entertainment services." Dega said.

He said that ASB would continue seeking further partnerships withcontent providers toboost its broadband solutions in China.

"It's a win-win deal between us," said Timothy Chan, chairman and chief executive officer of Shanda Networking Co Ltd.

"We are confident that the partnership will combine the strong brand image and core competencies of both companies to bring significant benefits to the service providers and the broadband industry in China," he said.

Analysts believe that ASB's parternship with Shanda Networking is part of the company's effort to develop from a carrier equipment supplier into a communications solutions provider.

In an earlier interview, Dega said this year was a year of transition for Alcatel Shanghai Bell to realize its goal of becoming the leading communications provider in China.

He says the company is to focus on several major businesses such as broadband access, third generation of mobile communications (3G) and NGN (next generation network) this year.

Alcatel now holds the Number 1 position in the DSL market worldwide.

The latest data from telecommunications industry analysis firm Dell'Oro Group, says Alcatel has so far a cumulative market share of 37.6 percent and a cumulative total of nearly 45 million DSL lines shipped.

(China Daily June 11, 2004)