Mr. Tao: I cover 13 Chinese companies, with a primary focus on software and technology companies in the telecom sector. In addition, I cover select companies in the consumer sector.
TWST: In the telecom space, which companies do you cover?
Mr. Tao: AsiaInfo, Telestone, China Information Technology and China TransInfo Technology. AsiaInfo is an operating support systems software writer to the only three telecom carriers in China. Telestone provides last-mile connectivity to Chinese telecom carriers. CPBY and CTFO also conduct business in the China telecom arena.
TWST: What is demand like for these companies' products at the moment?
Mr. Tao: TSTC's and ASIA's customers are China Telecom, China Mobile, and China Unicom, which are the only three telecom carriers serving all of China. After the 3G rollout is complete in China, I believe both operating support, such as billing systems, and connectivity will be the main driver or main factor in attracting new customers. Once you have 3G, you need contents and coverage, and all three telecom carriers will spend a lot of money on cap ex to increase and expand their coverage and product offering.
For the carriers right now, I believe the total cap ex has decreased, which makes sense, as the 3G rollout network had already been accounted for. Coverage and software previously accounted for a small percentage, but that percentage is now increasing. And even though money stemming from the carriers is decreasing, the total dollars spent in software and coverage is increasing. As a result, I would say the demand from the carriers of TSTC's and ASIA's products and services is very strong.
Tickers included in this excerpt: ASIA, CHA, CHL, CHU, CPBY, CTFO, TSTC
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