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Want To Expand Overseas? Take A Fast PoP To China


CIOs looking to set up shop in the East don't have to look much further than the West. Carriers and experts weigh in on establishing a presence in Asia.



With a U.S. recession looming and the dollar tanking, growing your business abroad is looking mighty attractive. Leading carriers, keen to cash in on globalization, promise reliable hosting and networking facilities within the Asia-Pacific region. They assure U.S. companies that dependable networks and convenient local account management will make doing business in Asia as easy as setting up shop in Peoria. But our analysis of their service offerings and discussions with experts tell a different tale.

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First, availability is a huge challenge: There have been 2,823 natural disasters in the Asia-Pacific region since 1997--nearly as many as in the United States and Africa combined. Just last month, four undersea cables snapped, crippling the Internet in the Middle East and dropping some 70% of traffic between Europe and Asia. Services are often a patchwork of local networks stitched together through many carrier contracts, while tax and regulatory structures vary wildly. Within India and China, two highly regulated countries, a 10-Mbps port from Verizon, for example, carries a monthly charge of $33,000 and $36,000, respectively. The same port in Hong Kong and Singapore runs $5,100.

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CIOs must realize that challenging physical conditions paired with these piecemeal agreements and the difficulties inherent in servicing remote locations strain network availability, degrade service quality, and raise prices. Still, GDP growth in China alone was 10.7% in 2006, and strong but sustainable annual growth between 9% and 11% is expected through 2010, according to Gartner. The value of China's international trade jumped to $1.76 trillion in 2006 and is expected to reach $2.7 trillion in 2010.

Our No. 1 tip before signing on with a provider in the region: Read the fine print.


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