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The next giant ISP is now in the hands of one of the most important players in the global broadband market: China Telecom.
The company will be the largest provider of broadband access in China, surpassing incumbent China Telecom, according to the latest report by the research firm iSEC Partners.
China Telecom has announced plans to launch its largest-ever gigabit fiber optic network to connect 100 million homes by 2020.
The network will cover a wide geographic area from Shanghai to Shanghai, and will have capacity of more than 10 gigabits per second (Gbps).
China has seen a massive growth in broadband access, and now has the capacity to provide 100 Gbps speeds to every home in the country.
According to iSEC, China Telecom’s acquisition of American Internet provider Bright House Networks (BHN) will provide the largest merger in the history of cable companies.
iSEC said that BHN will become the largest cable operator in the world, with the acquisition of the cable company potentially adding millions of jobs.
It will be China Telecom that will also take on US internet giants Comcast, AT&T, Verizon and Time Warner Cable.
BHNs new gigabit cable network will be made possible by the deployment of high-capacity optical fiber network.
“BHNS is a leading provider of high speed fiber optic networks that serve millions of homes across China, including Beijing and Shanghai, where broadband access to high-speed Internet is available, as well as in the remote regions,” iSEC noted.
While the deal has yet to be announced, China’s largest telecommunications company has already shown interest in the U.S. Internet market, with a $1 billion deal for Nextel.
Nextel is also one of several companies with a presence in the US Internet market.
In December, AT, Time Warner, and Verizon announced that they were merging to form a new cable giant called Charter Communications.
Charter has also recently entered the Internet space.
Despite the potential size of the deal, iSEC cautioned that it’s still too early to tell if the merger will actually lead to a massive merger in broadband.
For now, the focus is on the merger, iSec said.
Chinese telecommunications companies are a big part of the overall broadband market, as they control the country’s telecom market and have been for decades.
Though China Telecom will be one of its largest providers of broadband in the future, the company is not likely to become a dominant player in the industry in the near future, according the research.
As more companies move to offer gigabit broadband, the broadband market in China will likely continue to grow, said iSEC analyst Anirban Bhatia.
But in the longer term, China is likely to remain a global leader in broadband, as the country continues to build its infrastructure and infrastructure investment, said Bhatias research.
The Next Big ISP?
The acquisition of China Telecom by BT, Time-Warner Cable, and Bright House also puts the world’s second largest telecommunications market in the spotlight.
BT, which owns Sky and Sky+ cable networks in the UK, is the largest of the three companies.
Time Warner Cable is the second largest provider in the United States.
The deal comes just months after it bought the US satellite TV service DirecTV for $4.7 billion.
Earlier this year, China also bought the satellite television company Dish Network for $3.4 billion, becoming the second-largest player in U.K. and U.C. Berkeley’s Bloomberg reported that the deal could result in an increase in the number of Chinese internet customers, as Chinese internet users now account for about 30 percent of all internet users in the countries market.
“China Telecom’s potential acquisition of BT and Time-Web in China is an important milestone in China’s expansion into the global telecommunications market,” iSec analyst Eric Shoup said in a press release.
BT has been an outspoken supporter of the U,S.
telecommunications industry, including signing a $25 billion deal with Verizon in 2013, and its chairman said last year that he planned to use the BT merger to create a massive broadband network in the American market.