Asia telecom got down to business again in 2000. And despite a two-year financial crisis hitting different governmentsí economic planning, the telecom sector in the region has asserted itself with as much confidence as ever it has shown.

Major network orders have begun rolling again ñ capped by some of the worldís first orders for third generation mobile systems ñ and China has at long last opted in to the World Trade Organizationís agreement on liberalized competition in basic telecom services.

There are warning lights on here and there, just as they are winking in technology and telecom markets everywhere in the world, but the prospects for new business in the regionís giant markets are very much alive again. And regional equipment manufacturing companies are ready to take their expertise into western markets for 3G and broadband fixed access technologies among others. Already, Korea is racing ahead of Europe in the deployment of digital subscriber line systems.

To be sure, it could be some time before the regionís greatest prize, the market with 1,200 million people in China, is fully accessible to foreign companies.

But even now, there are considerable opportunities to build on. Our article on Chinaís Internet infrastructure shows how several foreign-owned network integrators and systems integrators are winning contracts with post and telecom authorities to build Internet Protocol backbones in regions, cities and nationally. The immediate demand for information technology installation in China could alone provide a market worth as much as $31.8 billion in 2003, according to International Data Corporation. These Internet enablers not only create an important channel for network equipment makers like Cisco Systems Inc., Lucent Technologies Inc. and Nortel Networks, but are laying a foundation for business in a networked China economy.

And first, there are several milestones to celebrate in Asia telecom: the completion of a national broadband transmission network based on high-speed asynchronous transfer mode (ATM) technology in Korea; the runaway success of mobile data service in Japan; and the launch of the worldís first global mobile satellite service by Asia Cellular Satellite (ACeS), part-owned by Lockheed-Martin Global Telecommunications, in Indonesia.

And in the last couple of months the cooperation agreement between Pacific Century Cyberworks (PCCW) ñ successor to Cable & Wireless as owner of the important Hong Kong Telecom operation ñ and Telstra Corporation, Australiaís national operator, has been agreed finally. That raises the prospect that a regional carrier alliance will at last be working independently of European and U.S. telecom giants, and potentially will champion the region on the world stage.

Some analysts have been guarded about the new combinationís prospects. What had looked like a smart move by Telstra to gain a new international direction by attaching itself to Asiaís rising star may yet turn out to be something less. PCCWís mobile properties in Hong Kong look shakier in the context of increased licensed competition and the company has been forced to renegotiate terms of the agreement. The rescue party is intact, but which is now the rescuer is less clear.

No doubt, the issues that telecom builders and service providers face in the Asia-Pacific region will look familiar to their counterparts in the United States and Europe.

Analysts and investors want to know which business models are going to work best for electronic commerce and the networked economy, and whether Internet service providers or telecom carriers are really capable of managing the new user of high-speed data systems, fixed and wireless.

And in the last couple of months, not all of the news from the industry has been so good.

Asian telecom analysts have been dealing with a series of troublesome announcements from leading companies:

Internet router manufacturer Cisco Systems Inc. has postponed plans to list its shares in Tokyo, disappointing market-watchers who had hoped the infrastructure leader would pull in a series of other big-ticket U.S. telecom and technology companies; Hong Kong telecom giant Hutchison Whampoa pulled back from the auction of spectrum for third generation mobile networks in Germany, casting gloom over Hong Kongís fiercely competitive mobile industry ñ reinforced by reports of a full yearís trading losses at SmarTone Telecommunications; and the pan-regional alliance between Richard Liís PCCW and Telstra had seemed close to collapse six months after it was announced.

The success stories need to be qualified too. Koreaís ATM network is still state-controlled and access is limited. NTT Docomoís i-mode mobile data service has yet to be tested outside its home market. Getting i-mode to work overseas will be a major management effort.  AceS may be the last chance for a global mobile satellite sector that seems to be failing in every other region.

But none of these Asian enterprises should be underestimated. An agreement with America Online, the worldís largest Internet service provider, suggests that NTT Docomo has moved swiftly to create the content partnerships which will also be channels for their international business development. NTT Docomoís stake in AOL Japan puts the Japanese mobile data pioneer in partnership with the worldís largest media producer, Time Warner.

In truth, Chinaís accession to the telecom business of the WTO dismayed some western analysts. The terms of Chinaís offer of liberalization are heavily qualified and it may be some years before significant competition in services appears in that market. Getting licenses in China will not be easy; residential qualifications mean companies planning to take advantage of the supposed new rules will not be able to practice business for three years. They must open their offices now.

It could have been worse; Chinaís negotiators wanted a revenue qualification too, so that companies with revenues of less than $10 billion would not be allowed telecom licenses in the Peopleís Republic.

But happily that result was avoided, and the scale of the proposed license requirement only serves to underline the phenomenal size of the market-in- waiting. And anyway, for foreign companies, there is already a point of presence in Chinaís telecom market which could prove telling in the next few years. In our article on Hong Kongís regulator, the Office of the Telecommunications Authority, we show how quickly and extensively competitive licensing has been admitted in every key area of telecom activities, right up to 3G mobile. OFTAís legacy potentially will be one of the major factors in market development in mainland China.

But there are still plenty of local and national issues peculiar to the region. National markets do have their own characteristics.

Despite the takeoff of the new electronic business in Hong Kong and Japan, these burgeoning sectors will need a source of new product  ideas to sustain them, and that must start to happen locally.

îAmazingly enough, the B2B market in Japan has not given rise to a lot of new companies,ì said Jean-Marc Patouillard, director of fund management company Partech International Inc., of San Francisco. ìThis is really not good for development of Internet enabling software applications.î

Japanese companies and their suppliers are faithful partners; they do not make new contracts with others readily. That makes it difficult for them to do B2B e-commerce, which by definition requires companies to be changing suppliers frequently to get better deals.

But Patouillard sees this not as a consequence of so-called business culture differences. The development standstill might even be explained by lack of entrepreneurial innovation, stifled by big corporate dominance. But more important, the financial system does not provide seedcorn capital for startup projects. Talent could be unlocked, if there was capital liquidity to float it on.

One sector which has kept pace throughout the past couple of years ñ Pacific submarine cable building-continued steadily into the new century with more projects announced. But here too the markets have checked attempts to turn big spending projects into businesses offering returns on investment. Last month, Asia Global Crossing submitted to the stock markets and cut its initial public offering by half. Asia telecom will not be a soft option for investors who think it is hard to make money in other regions, but it promises to be at least as rewarding  for those businesses which make the right decisions.