Teleste has reached agreements with the government cable operator of Gansu Province and Shanghai OTEC Information Technology. As a result, Teleste will have 10 per cent ownership of a joint venture owned by the three parties. The agreements also cover sales development of the Chinese cable market as well as commencing a local manufacturing facility.
In step with the digital revolution, the Chinese government has started an intensive programme to develop the services offered by cable operators in China and, accordingly, to invest in modernising the cable network infrastructure. The Chinese cable operators have more subscribers than the entire European cable footprint. To enhance this development, small independent cable operators have been consolidated into strong provincial-level entities. Typically, such provincial-level operators correspond in size with European national cable operators.
In Gansu province, there are significant investments on-going to develop the local infrastructure. The basic pillars of the collaboration consist of Teleste’s advanced technology and product solutions, OTEC’s existing sales network in China as well as Gansu province industrial park with its modern manufacturing infrastructure.
With this agreement, Teleste wants to develop its sales in China as well as enhancing its competitiveness on the Chinese market through licensing its volume product manufacturing to a local joint venture. Teleste’s Luminato digital headend as well as other high value-added products represent the largest sales potential. In the future, the intention is to use the Gansu joint venture manufacturing facilities as a contract manufacturer for passives products aimed at Teleste’s European market.
“This collaboration agreement opens up an opportunity for Teleste to further develop our sales in China, where significant investments will be made in advanced cable network infrastructure. Furthermore, the manufacturing facilities of Gansu joint venture will complement our network of contract manufacturing partners by offering cost efficient manufacturing, coupled with the benefits of close partnership. We are looking forward to fast ramp-up of the co-operation in order to respond to the opportunity offered by the rapidly developing market in China”, said Hanno Narjus, Senior Vice President, Video and Broadband Solutions.