At&t in China Essay Example | Topics and Well Written Essays - 1750 words

At&t in China - Essay Example AT&T also needed to reconsider how its decentralized organizational structure could serve as a barrier in China where product pricing are mixed up with other factors in sealing contracts. Another barrier to be faced with a long-term view was that telecoms sector in China would probably remain a heavy regulated industry for a long-time. Like media and utilities, the telecoms industry is a sector that Chinese authorities would not trust wholly into the hands of foreigners because of its national security implications. It must be assumed that since AT&T already signed a Memorandum of Agreement (MOA) in February 1993 with the Chinese authorities allowing AT&T to offer its broad array of services in the country albeit jointly with the Chinese government meant that at even with the regulated aspect of the telecom industry, the company had been given room to negotiate terms in their undertakings. And even when the United States threatened to tie China's human rights record to the renewal of its Most Favored Nation Status - AT&T, being the America's biggest telecom firm was at an opportune time to use it to leverage its influence on the US government and use it to negotiate some favorable terms from the Chinese government. To be able to compete in China, AT&T needed to address three fronts so as to keep up with the challenge - first, the heavy regulated aspect of the Chinese telecommunicat... whose focus is to provide direct telephone services as could be seen in its primary operations in the United States was a challenge in China where providing actual telephone services was closed off to foreign companies. It must then re-focus on manufacturing and systems and network infrastructure build-up for the state enterprise agencies responsible for purchase of telecom equipment at least for the short term while actual provision of telephone services were yet closed off. The decision of whether to embark on a national manufacturing strategy must be deferred according to the set-up of the telecom industry in China, where economic decision making had been decentralized to the local government units.1 AT&T could focus building manufacturing plants on targeted locations based on which provinces or regions offer the best deals in terms of market access, tax breaks, availability of manpower, availability of competitive facilities and utilities, etc. But first it must explore venues to establish joint ventures with local Chinese companies especially in the field of 5ESS switch manufacturing, VLSI manufacturing, network management expertise, R&D with Bell Labs, optical transmission manufacturing, wireless manufacturing, customer premises equipment manufacturing, training, systems integration, and network service offerings.2 The strategy of having local Chinese partners would greatly help a foreign company such as AT&T to smoothen relationships with Chinese telecom regulators. Local partners would also offer valuable insights into the unique aspects of the Chinese market, with the special note that AT&T in 1993 had very few years of experience in terms of international or global strategizing. The importance of local partners takes an even more importance as the foreign