Pacnet has announced plans to expand its IP VPN footprint and market coverage in China, to serve large customers including carriers and multinational enterprises.
Pacnet's equity joint venture in China, Pacnet Business Solutions (China), or PBS, has received an enhanced value-added service license from China’s Ministry of Industry and Information Technology.
The license expands PBS’s IP VPN coverage from 20 cities to 23 provinces. It is the first Sino-foreign telecommunications joint venture to receive this license, which also allows PBS to continue to operate internet data centers in five cities and provide internet access in 10 cities.
Pacnet will connect its IP VPN service to these data centers, providing a platform to offer enhanced managed services and cloud-based services.
The company said it will be eyeing these Chinese firms that offer e-commerce and telecommunications services.
PBS will now be able to deliver its IP VPN service to the province-level municipalities of Beijing, Tianjin, Shanghai and, Chongqing and 18 provinces. The autonomous region of Inner Mongolia will also be covered.
“China now has the world’s largest internet population and it continues to grow rapidly, requiring a need for accelerated infrastructure growth to meet the increased appetite for connectivity,” Pacnet CEO Carl Grivner said.
Domestic Chinese companies, such as the incumbent telecommunications service providers, comprise roughly 50% of PBS’s clients, with global multinational corporations making up the remaining half.
According to Frost & Sullivan, the domestic IP VPN market in China is expected to grow from $974 million in 2012 to over $2.5 billion by 2017.