DASAN to merge with US telco

For years, US law has kept an eye on some Chinese providers due to their suspicions about potential security threats. Devices with “always on” network connectivity are enabling new types of attacks that have not been seen in the past. These devices represent a new set of targets for potential crime and data exposure. It is imperative that assurance, security, and governance professionals take note of the IoT trend, especially when it links to the telecommunications industry and even national security.

Recently, DASAN Networks, a South Korean network provider for the global telecommunications industry, decided to merge with US company Zhone Technologies, a global leader in Fiber Access Transformation for service providers and enterprise networks.

The agreement, expected to be clinched this summer, comes on the heels of the Trans-Pacific Partnership and will assist Vietnamese telecommunications providers in dealing with security threats.

VIR’s Thanh Tung conducted an exclusive interview with chairman of DASAN Networks MinNam Woo on what Vietnamese companies can expect for the industry following this merger.

Why did DASAN Networks decide to acquire Zhone Technologies?

DASAN Networks is a global network provider. We have been growing significantly for the past few years thanks to our dedication to our clients’ success, with a strong foothold in Asia. Zhone Technologies, a global leader in fiber access transformation for service providers and enterprise networks serving more than 750 of the world’s most innovative network operators, has major footholds in North America, Europe, and the Middle East.

The US is a high-demand market, with a lot of international requirements and standards (like Federal Communications Commission certificates or ISO 9001), especially in regard to security.

Once accepted into the US market, any product or solution could be accepted worldwide. Through our merger with Zhone Technologies, DASAN is seeking to position ourselves as a provider of quality products and services in America, especially in the booming new IoT sector, which has many potential IT threats. We will combine the strengths of both companies and dedicate all of our energy to our clients.

The new company, named DASAN Zhone Solutions, will deliver a broad array of products that will allow carriers and enterprises to enable better global connectivity.

How will DASAN’s merger impact Vietnam, especially its local telecommunications industry?

What percentage of devices used in Vietnamese telecommunications are Chinese? We have no exact number, but it is true that Chinese devices have garnered a lot of interest not only from Vietnam but also across the world due to their relatively low prices. Yet, if cheap prices lead to security threats, will these low-cost items remain favourites for local telecommunications carriers? The answer is obvious, but it definitely takes time. DASAN is seen as a new brand name in Vietnamese telecommunications, but for other countries like South Korea, Japan, or the US, and in countries with top-level 4G or even 5G services, we are not new.

DASAN provides another choice for local carriers, with international-standard devices manufactured in South Korea, Vietnam, and now the US. We also have three research and development (R&D) centres in South Korea, India, and Vietnam, which have been operating for the past 20 years.

This year, we are planning to double our R&D workforce in Vietnam to serve clients worldwide. DASAN will pave the way for the development of a highly skilled labour force in Vietnam, especially in electronics and engineering.

Last but not least, as a US company, we can assist local telco carriers in their plans to expand to the US market, one of the most lucrative markets in the world.

Drawing from your experience in supporting global telecommunications implementing 4G and 5G services, do you have any advice for Vietnamese telecommunications providers and the Vietnamese government?

Long Term Evolution (LTE) drives every country on the globe. To cover soaring data traffic and meet higher expectations of service quality, mobile network operators need to find a way to upgrade their bandwidth; at the same time, cost-effectiveness is very important.

Our solutions focus on these points, and we have a lot of experience in assisting leading telco providers in Japan, South Korea, and now the US and European countries. We want to plant the seeds of that experience here in Vietnam.

Exploiting information for social development is a high priority for any country, including Vietnam. 4G and 5G infrastructure enable every individual and enterprise to make data contributions to society in real time.

In Vietnam and elsewhere, returns on investment in 3G infrastructure have not yet met expectations. Mobile network providers therefore need to find a smart and cost-effective investment strategy to deploy 4G while still re-using 3G infrastructure. DASAN is an expert in this.

It is important that the Vietnamese government grant 4G licences for mobile network providers soon, so that Vietnam will not lag behind the rest of the world. Also, the Vietnamese government should apply special requirements for any company entering the local telecommunications industry, especially those providing network devices, as is the practice in many other countries. This would ensure the highest level of security in information and communications.