Sumitomo Electric Networks invests in YOTC

JULY 11, 2007 -- Per the agreement with YOTC, Sumitomo Electric Networks will hold an 18.9% stake in YOTC, and the YOTC board will have two members from Sumitomo Electric Networks. The two companies say they will collaborate on expanding the sale of GE-PON products in the Chinese market.

JULY 11, 2007 -- Sumitomo Electric Networks Inc. (search for Sumitomo) today announced that it has signed a contract for investment in Wuhan Yangtze Optical Technology Co., Ltd (YOTC), manufacturer of Fiber-to-the-Home (search for FTTH) communication equipment in Wuhan City of Hubei Province, People's Republic of China.

Sumitomo Electric Networks, a member of the Sumitomo Electric Group, in 2004 started marketing its GE-PON equipment, which allows a maximum of 32 households to share a 1-Gbit/sec optical fiber and has since logged a solid delivery record in the Japanese FTTH equipment market, claim company representatives. In June 2007, the company received orders from Taiwan's Chunghwa Telecom Co., Ltd. for GE-PON equipment.

The most promising market for FTTH equipment outside Japan is China where further construction and expansion of information infrastructure is expected following such large-scale events as the Beijing Olympics and Shanghai World Expo, say Sumitomo representatives. The number of FTTH subscriber lines in China is projected to reach 20 million by 2011.

Per the agreement with YOTC, Sumitomo Electric Networks will invest 25 million Chinese yuan for an approximately 18.9% stake in YOTC, and the YOTC board will have two members from Sumitomo Electric Networks. The two companies will collaborate in expanding sales of GE-PON products in the Chinese market.

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

"Although YOTC is a young company established in 2006, it has excellent presence in the Chinese FTTH equipment market," notes Mr. Tsuyoshi Kawano, president & CEO of Sumitomo Electric Networks. "YOTC has powerful sales forces that know the local market and also has advanced technological development capabilities for supporting local customer needs. For Sumitomo Electric Networks who has considerable experiences and achievements in the FTTH equipment market in Japan, YOTC is the best partner to enter the dynamically growing Chinese market," he adds. "Sumitomo Electric Networks sees the investment into YOTC as a pillar that supports its overseas FTTH business and will strive to support the growth of YOTC."


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