Asia is the largest and most populous Continent in the world. Along with the economic development of Japan, Southeast Asia, China and India since the 1950s, Asia is becoming one of the three greatest global economic regions, at the same level with Europe and North America. It plays a more and more important role in the world economic system. Although there occurred a financial storm, East Asia was always the area with the most active economic development and highest increment speed in the 1990s. From a medium-term or long-term point of vies, East Asia will become the most important arena for the world economy entering into the great competitive age.
Among Europe, North America, East Asia and other main economic regions in the world, only East Asia developed with high average annual speed of more than 7% in the whole 1990s. The GDP of East Asia was only US$ 100 billion in the later 1960s; however, it reached up to US$ 2400 billion in the later 1990s. It is 8% of the world GDP in 1997. In respect of commodity trade, the total trade volume of East Asia in 1970 is less than US$ 20 billion, which was only 5% of world trade volume;' while in 1999, the total export value reached up to US$ 970 billion and import value US$ 850 billion, which were 18% and 15% of world volume respectively. In respect of international capital inflow, East Asia witnessed a high-speed increase in the early 1990's. In 1998, the direct investment absorbed was already 515 of the total volume invested directly by the USA, Japan and European Communities Countries to the developing countries. The White Paper regards East Asia as the central area of world economic development in the last decade of the 20th century. This is mainly attributable to the ever increasingly rapid progress of trade liberalization in East Asia, the entrance of European and American enterprises into East Asia mainly in the form of acquisition and merger; as well as the rising up of China, which is practicing socialist market economy.

Furthermore, along with the rising of Asian economy, its information industry and IT (application) are also developing rapidly. India has already been a major exporter in software worldwide. Singapore and Malaysia are on the way to the second wave of information age. Thailand, which started a little later, is beginning to establish a software development base. China is also accelerating the software development while promoting actively the development of hardware industry. Recently, the demand growth for personal computer (PC) on international market is slowing down and the price of high-tech share is suffering a serious setback. However, the main export item for Asian economic recovery is the products of information science and technology, so that the development of information science and technology is still the main driving force to recover Asian economy. At the same time, the E-Commerce is expanding rapidly along with the development of IT industry and Internet. With certainty, the expanding of E-Commerce will bring a completely new innovation to circulation and production fields. It is estimated by experts that currently the E-Commerce transaction volume in the Asia-Pacific region will expand with an annual growth rate of 100%, and it will reach US$300 billion within three years.

1. Current Situation and Characteristics of the Asian Telecomm Operating Industry Development
1.1 Continually Improved Status in the World
The Asia-Pacific region has a population of more than 3.6 billion. It is the largest market of communication products and service in the world. The 1990s is the most important period for the communication industry development in this region. During the past 10 years, the number of telephone users has recorded two fold increase and is already above 300 million at present; and the number of mobile phone users increased from 0 to 165 million.
The telephone occupancy per capita in the Asia-Pacific region witnessed a rapid rising trend in the 1990s, the most outstanding countries of which are China and India. In China, the number of fixed telephone users in 1984 was only 2.8 million and the fixed telephone occupancy per capita was only 0.25%. Ten years later the number of telephone users increased to 27 million; and the telephone occupancy per capita reached 10%, which was higher than the average level of 8% in the Asia-Pacific region. Moreover, the number of mobile phone users increased from 1.5 million in the early 1995 to 43 million in the early 2000. At the beginning of 2000, the mobile phone occupancy per capita in Japan and USA was 49% and 32% respectively, while that in China was only 3.4%. In India, the number of fixed telephone users in 1990 was only 5 million and the fixed telephone occupancy per capita was 0.59%. By the end of 1999, the number of fixed telephone users increased to 25 million; the fixed telephone occupancy per capita increased by fold five and reached 2.56%. In the mobile phone market, along with the introduction of telephone fees prepaid, the number of mobile phone users in India will increase substantially and the number of Internet users is also on the rising trend. According to the statistics of Nua Internet Surveys, the number of Internet users increased from less than 1 million in May 1999 to 4 millions in March 2000.
Looking at the whole Asia, the number of fixed telephone users in 1995 was 159 million, which was only 4.1% of the aggregate population in this region. While at the beginning of 2000, the number of telephone users in Asia was already more than 300 million. Moreover, only within one year of 1999, the newly increased number of mobile phone users in the Asia-Pacific region was above 50 million, which was twice as much as the newly increased number of fixed telephone users during the same period. At present, the number of mobile phone users has already exceeded that to fixed telephone users in Kampuchea, Hong Kong (China), Japan and Korea. Therefore, ITU predicted that in this region the number of mobile phone users would exceed that of Internet users in the Asia-Pacific region has also increased rapidly. According to the statistics of Nua Internet Surveys, the number of Internet users in the Asia-Pacific region was already near 90 million by the end of July 2000. Up to 30 June 2000, the Internet users in China already reached 16.9 million. If keeping the current speed of increase, it is certain that the number of Internet users in China will exceed that in Japan within two years.
In 2000, the sales amount in Asian telecomm market reached US$ 400 billion, which accounts for 20% of that on global telecomm market. At the same time, since the telecomm infrastructure in the whole Asia is still weak, the telecomm industry is still being developed rapidly. Especially along with the continuous development of telecomm technology, the new telecomm services arise ceaselessly. Internet and mobile communication services become a new hot spot of the whole Asian telecomm market developing with high speed. In the mid-2000, there will be 150 million mobile users on the mobile phone market. According to the investigation of DCI Inc., the data services, including DDN, Frame Relay (FR), ATM and Internet, were increasing continuously. Among them, ATM and FR were increasing with fastest speed. It was estimated that from 1995 to 1999, the annual accumulative increased income was 77% for FR services and 69% for ATM services. According to the study of VS Group, the annual accumulative growth of FR reached 98% in the Asia-Pacific region, where is the region with the fastest growth speed globally. In the whole Asia, the quantity demanded for data services is very large. The demands of new technology and users bring a new opportunity for telecomm service suppliers. In the coming four years, the 3G service market in Asia will reach US$ 50 billion.
The development of the telecomm industry in the Asia-Pacific region has a bright future. The governments of the countries in Asia attach great importance to the economic and social efficiency brought by the telecomm industry. They consented to enhance the service force of the telecomm industry. Therefore, in the coming decade the Asia-Pacific region will become the largest telecomm market in the world.

1.2 Accelerated Opening Progress of Telecomm Market and Intensified Market Competition
Since the 1980s, the global competition of world telecomm market is more and more intense. The main developed countries in the world introduce the competition into their domestic telecomm markets, breaking the monopoly and relaxing the control. At the same time, these countries also support their domestic telecomm enterprises to realize the multi-industry and multinational reorganization, so as to seize the international market opportunities.
Under this background as well as facing with the opportunity and challenge of telecomm market development, some countries in Asia began one after another to reform their traditional telecomm management pattern, while establishing independent telecomm management and opening the telecomm market in a planned way. In 1979, the Philippines became the first country in the Asia-Pacific region to establish a Telecomm Administrative Bureau. 15 years later, Hong Kong took after the Philippines in 1993. After that, 9 countries and regions in the Asia-Pacific region established independent telecomm administrative agencies: Mongolia and Pakistan established Telecomm Administrative Bureaus in 1996; India and Sri Lanka in 1997l Nepal in 1998; and Bhutan, Malaysia and Singapore in 1999. In addition, Afghanistan, Bangladesh, Brunei, Kampuchea, Iran, Israel, Korea, Laos, Thailand and other countries also planned to establish independent Telecomm Administrative Bureau. The establishment of independent telecomm administrative agency is conductive not only to the elimination of unfair competition but also to the offering of better services to users.
During this progress, the telecomm markets in some Asian countries are opening up gradually; the merger wave of the companies within this industry is all the rage for a time; the offering of network service is becoming the main point of development. According to proposal put forward by the Singaporean government in 2000, Singapore will fully open telecomm market; cancel the restriction that the shares held by foreign businessmen in the telecomm industry can not exceed 49%; attract foreign businessmen to enlarge investment in its domestic IT and telecomm industries. Indian government is planning to open up its telecomm market; permit foreign investors to establish sole foreign-funded ventures to operate in the Indian telecomm industry, so as to change the situation that the telecomm industry is mainly monopolized by the state-owned corporations. In order to be in an invincible position in future competitions, Malaysia telecomm corporations are looking for foreign partners with abundant strength, so as to obtain advanced technology and management experience. This can also be seen from the recent actions of China Telecomm and China Unicom. At the same time, the progress of China's entry into WTO would certainly further accelerate the reorganization and combination of enterprises. In addition, the market operation is more and more difficult; the competition is more and more intense; the cost inflation of user's equipment occurs ceaselessly; the income of traditional long-distance telecomm business decreases continually; the 3G mobile communication is approaching day by day, all of these have forced both the new and the old operating carriers to find strategic partners to solve problems together, to go international and to face up to the global integration of telecomm.
At the same time of opening telecomm markets by the Asian countries, the progress for the combination and reorganization inside the telecomm industries of Asian countries has also been accelerate. In the Philippines, Long Distance Telephone Corporation amalgamate with Sumate Telecomm Corporation at the end of last year, by which it kept the hegemony position inside its country. After 2000, Global Telecomm Corporation declared to amalgamate with Island Telecomm, so as to form the second largest corporation inside the Philippines Global Telecomm and Island Telecomm are shared by Singapore Telecomm Co. and German Telecomm Co. respectively. Therefore, after amalgamation, it nor only has more abundant assets, but also can accelerate the technology upgrading and face up to the challenges from other multinational corporations. In Hong Kong, PCCW purchase Hong Kong Telecomm Corporation. By defeating its powerful rival-Singapore Telecomm, PCCW signed an agreement with British Cable and Wireless Limited on the acquisition of Hong Kong Telecomm. After amalgamation, the market value of the new corporation would exceed US$ 70 billion.
In recent years, facing the tremendous market of Asian telecomm, some multinational corporations forestalled to occupy Asian markets, which makes the market competition more and more intense. To develop the telecomm markets, American Telegraph and Telephone Co., British Telecomm, Motorola, German Telecomm Corporation, etc. invested billion of US$ in Asia. Moreover, there were also many international network corporations flying over into Asia. In the future, there would be more multinational corporation racing to occupy Asian markets of mobile phone, telecomm infrastructure construction, international long-distance call service, as well as network.

1.3 Telecomm Infrastructures Are Still Weak; and the Regional Development Differences Are More and Moore Distinct
Asian telecomm is developing rapidly. However, except few countries, the infrastructures of the whole telecomm industry are still very weak as compared with the developed countries. Up to 2000, in Asia (except Japan), the telephone occupancy per capita was only 6%; personal computer occupancy 1%; mobile phone occupancy 2%; and Internet user infiltration rate 1%, which were far behind those of other continents as shown in the figure below:
Although the infrastructures of Asian telecomm are lagging behind, due to the very large population and the rapid development in recent years, the market scale of Asian telecomm still plays a very important role in the world and has great growth potential. Taking Internet users for example, although the Internet user infiltration rate in Asia was only 1%, the Internet users already reached 45 million by the year 2000. In addition, in recent years the number of Internet users in Asia has increased at a speed of 20 points above average global level as shown in the following figure:

1.4 New Telecomm Businesses in Asia Are Developing Quickly
The general trend for telecomm network development is: from wired to wireless; from narrowband to wideband; as well as from voices services to data services. Data communications is one kind of communication method and communication service produced by the combination of computer and communications. Along with the popularization of Internet, it is necessary to develop the mobile communication to meet the demands of multimedia. It is certain that the future information network will take the data network as the center. In the past two years, data communication and multimedia communication became the key points of communication network development. The data communication services increased annually according to the index law. Its development is the trend of the times. In world network services, the annual growth rate of telephone services is 10%, while that of data service is 40%. It is predicted that the rate of voice service and that of data services will be at the same level in 2003. After that, the data communications services will exceed telephone communication service in quantity and dominate the market. For Asian countries, although the traditional communication services are far from saturated, the new telecomm services are still increasing at high speed.

1.4.1 Development trend of IP service
In Asia, the access technology and services of Internet were still the main points of the IP market in 2001. It can be predicted that the business volume of IP would increase substantially and there is a hope for it to approach or exceed the business volume of circuit switching. For the newly joined carriers, the unified transmission service, IP facsimile, the calling center based on WEB, as well as other services of such feature and value-added services have become the important means to gain market shares.
1.4.2 Wideband market
It was forecasted that the demand for wideband in the world would increase from 3Tb/s last year to 7Tb/s in 2001, and hopefully to reach 2Tb/s next year. Considering that the Asian telecomm markets are still monopolized by the state-owned enterprises, there are many business opportunities in these regions for the wideband suppliers.
1.4.3 3G market
3G mobile communications already became one development trend of telecomm market. However in fact the real 3G commercialized technology is not matured completely. The development of future 3G markets still depends on the development of 2.5G GPRS in the market to a certain extent. NTT DoCoMo in Japan declared to postpone the opening of WCDMA, while Korea, Singapore, Taiwan and Hong Kong are still waiting and seeing.
1.4.4 Mobile data market
At present, the main mobile data markets in Asia are still SMS short message service. However, it holds only a small portion of market shares, and will make up no more than 19% of the gross cellular communications income in 5 years. For the development of WAP mobile phone, in addition to the technical problems, the poor service content has already become an important factor affecting its market development.