Sumitomo aims at China's FTTH market

Sumitomo Electric Networks, a member of the Sumitomo Electric Group, has signed a contract to invest in Wuhan Yangtze Optical Technology (YOTC), a manufacturer of FTTH (fibre-to-the-home) communication equipment in Wuhan City of Hubei Province.

Under the contract, Sumitomo Electric networks will acquire about 18.9% stake in YOTC by infusing RMB $25 million into the company, thus, Sumitomo Electric Networks will occupy two seats in the YOTC board.

The investment cooperation aims at expanding the sales of GE-PON products in the China.

Sumitomo Electric Networks, in 2004 started marketing its GE-PON equipment that allows a maximum of 32 households to share a 1Gbps optical fibre.

Sumitomo Electric Networks believes that the most promising market for FTTH equipment outside Japan is China. For the upcoming events such as the 2008 Beijing Olympics and Shanghai World Expo are seen as catalysts for promoting expansion of information infrastructure. The number of FTTH subscriber lines in China is expected to reach 20 million by 2011.

Sumitomo Electric Networks' investment in YOTC signifies the formation of an optimum complementary relationship between the two companies in developing, manufacturing and marketing FTTH communication equipment including GE-PON products for the Chinese market, thus allowing Sumitomo Electric Networks to powerfully advance into China's telecom carrier market.