Chinese towns to embrace Big Blue tech

Doug Young

HONG KONG: Hong Kong's Culturecom Holdings Ltd and technology giant IBM will strengthen their alliance to bring high-tech communications to rural China.

Under their latest tie-up, IBM and Culturecom will promote Culturecom's e-Town product, billed as a cheap way to bring rural China into the computing age using low-cost network computers, DVD stations, set-top boxes and multimedia telephones.

Culturecom, which is preparing to launch its first e-Town in southern China's Yun An County in Guangdong, will handle marketing, installation and management of systems, with IBM providing technical support.

IBM will supply much of the hardware used to make the e-Town systems, while Culturecom will develop the systems and provide support services.

Culturecom said it plans to build 100 e-Town networks in the next two years and 250 within three. Local governments will pay for the networks.

Hardware for such systems typically costs HK$2 million to HK$3 million (US$256,000 to US$$384,700) with software an additional HK$1 million, said Culturecom's senior vice president Benjamin Lau.

A system at the upper end of that range is able to serve a township of up to 10,000 users, he said.

IBM and Culturecom already work together in Culturecom's other major business, making computer central processing units (CPUs) with built-in Linux and Chinese language capability.

Under that alliance, IBM supplies chips to Culturecom, which builds in Linux and Chinese language capabilities and markets the finished product under the name V-Dragon.

Each of the new e-Town systems are expected to use at least 3,000 to 5,000 V-Dragon chips, said Lau.

IBM has been a strong supporter of Linux, a so-called "open source" free computer operating system billed as cheaper to own and operate than Microsoft's Windows, which powers the vast majority of the world's computers.

The Chinese government also strongly supports Linux as a way to avoid the high prices for Windows and related products.

Culturecom shares have more than doubled this year as the company signed its first orders for V-Dragon chips.