For Immediate Release
December 17, 1996


NTT, SPT Agree to Establish Joint Venture Telecommunications Engineering Company in Shanghai

Nippon Telegraph and Telephone Corporation (NTT) announced today that it has agreed with Shanghai Posts and Telecommunications Administration (SPT) to establish a joint venture company in Shanghai to enhance telecommunications services and promote the development of new telecommunications technologies and operations in China. NTT and SPT will hold a signing ceremony in Shanghai at 18:00 local time (19:00, Japan time) today.

1. History

To respond to the rapid demand for telecommunications services, SPT, which solely manages the postal and telecommunications services in Shanghai, has obtained know-how on advanced technologies and services from overseas telecommunications carriers and has targeted the further development of telecommunications services in Shanghai.

SPT at this time has agreed to establish a joint venture company with NTT to conduct consulting and staff training for new technologies and services, such as mobile communications services.

NTT also will contribute to the development of Shanghai telecommunications by transferring NTT's technologies and know-how through the joint venture company.

2. Outline of Joint Venture Company

(1) Name: (Chinese)
(English)Shanghai NTT Telecommunications Engineering Co., Ltd.
(2) Location: Shanghai City, China
(3) Capital: U.S.$1 million
(Investment: NTT, U.S.$0.51 million, SPT, U.S.$0.49 million)
(4) Activities: (1) Consulting for the mobile communications business and staff training and education
(2) Construction, formation, maintenance, design and consulting for company networks
(3) Consultation and development on new technologies and new services (multimedia, Open Computer Network, etc.) for businesses

3. Future Plans

The new company will begin business after the Shanghai Foreign Investment Commission, an examination agency for joint venture companies, ratifies the company's establishment and the Shanghai Administrative Bureau for Industry and Commerce issues permission to begin business operations.

4. Signing Ceremony

(1) Date:December 17 (Tues.), 1996
Local time 18:00-
Japan time 19:00-
(2) Place: Carnation Room, Shanghai City, second floor of the Garden Hotel
(3) Attendants: Cheng Xuyuan, director of SPT
Noboru Miyawaki, Senior Executive Vice President of NTT

(Reference)

1. Shanghai City Outline
(1) Size: 6,340.5km2 (China is about 9.6 million km2)
(2) Population: 12.99 million
(the population of China is about 1.19billion as of 1994)
(3) Language: Chinese is an official language though the Shanghai dialect is still popular among local residents.

2. Chinese Telecommunications

(1)Operational entity of Chinese telecommunications

Chinese telecommunications services are provided by the Ministry of Post and Telecommunications (MPT), a supervisory ministry and operational entity. The MPT has placed more than 10 million line extensions with the objective of increasing China's telephone penetration rate. The ministry expects to have a total of 170 million lines in place by 2000, toward China's goal of becoming the world's largest telecommunications country in the 21st century.

In addition, it is projected that there will be 7 million cellular telephone subscriptions by the end of this year for a total of 18 million by 2000, when further expansion of the market is likely to occur.

In line with these circumstances, the MPT restructured its organization in March of 1994, changing the role of China Telecom, an operational telecommunications organization belonging to the MPT, to that of a corporate division with a self-supporting accounting system, and has been strongly promoting the development of the telecommunications market.

(2) Posts and telecommunications administrations in autonomous districts, cities and provinces

China Telecom has provided international communications services and domestic long-distance communications services interconnecting the provinces. A posts and telecommunications administration manages and operates the local telecommunications services in each autonomous district, city and province.

3. Telecommunications in Shanghai

(1) Shanghai Posts and Telecommunications Administration (SPT)

This unitary entity manages and operates the posts and telecommunications services in Shanghai City as one of the administrations within the Chinese Ministry of Post and Telecommunications, and the Shanghai Municipal People's Government.

Its major operations are posts, postal savings, newspaper distribution, local and long-distance communications, telex, fax, data and video communications, mobile radios, communication satellites, and the transmission, processing and collection of information.

(2) Major SPT telecommunications data (as of the end of 1995)
Total telecommunications
operations amount: 4,720 million yuan (about 60 billion yen)
Telephone subscribers: 2.23 million (17.2 units per 100 people)
Pager subscribers: 120,000
Analogue cellular
telephone subscribers: About 140,000
Digital cellular
telephone subscriber: About 30,000


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