IBM Helps Shanghai Research Institute of China Telecom Corporate Limited Revamp Its Innovation Pipeline

Market Wire, November, 2007

IBM (NYSE: IBM) today announced that the Shanghai Research Institute of China Telecom Corporate Limited (STTRI) has chosen IBM's Innovation Factory to support collaborative innovation and accelerate the development of emerging telecommunication services for the Chinese market.

Made in IBM Labs, Innovation Factory can help accelerate the innovation process through open collaboration based on Web 2.0 social networking. IBM Innovation Factory is designed to capture the innovation process from idea creation to commercialization, speeding up co-creation among employees, partners, software developers and subscribers through online communities.

Over the past six months, STTRI partnered with the IBM High Performance On-Demand Solutions (HiPODS) Labs and IBM China Research Lab to successfully launch Innovation Factory as the platform for China Telecom "Innovation Works," a tool to facilitate enterprise innovation activities. It will support the second Innovation Contest at STTRI, which encourages institution-wide collaboration to rapidly scale up production of new ideas for service offerings. Innovation Works encourages STTRI employees to continuously innovate by sharing new ideas, partnering with other employees and providing real-time feedback on ideas.

The strategic partnership between STTRI and IBM, which started in 2005, is a natural extension of previous joint research and development programs between STTRI and IBM's China Research Lab (CRL). CRL helped STTRI launch its first innovation contest in 2006. Through this successful collaboration, both sides decided to take the partnership to the next level -- Innovation Factory.

Mr. An Ming Li, Director of STTRI, said, "China Telecom, together with its strategic partner IBM, successfully launched Innovation Works. IBM's Innovation Factory solution has enabled our researchers to be more productive in generating new ideas. We look forward to the next phase of collaboration."

The Innovation Factory solution developed for STTRI will be demonstrated today in Shanghai by Dr. Willy Chiu, Vice President of High Performance On-Demand Solutions, IBM Software Group.

"Our partnership with STTRI has inaugurated an exciting era of open innovation in one of the fastest-growing technology marketplaces in the world," said Dr. Chiu. "IBM enables China Telecom to quickly identify and create new and innovative telecom services that meet a customer's latest requirements, so that its growing customer base can quickly access the functionality needed in today's evolving Chinese marketplace for optimal business performance."

IBM's Innovation Factory was first announced in March 2007 to help companies rapidly conceive and conduct trials on new products and services. Its software components include collaboration technologies from IBM Lotus Connections.

IBM provides Innovation Factory both as a hosted service running on its cloud computing infrastructure at the Almaden Research Center, and as an onsite solution deployed at customer sites. IBM has enhanced Innovation Factory to include idea management capabilities. Further enhancements, including additional Web 2.0 and social networking tools, are planned to be released in 2008.

For more information in Innovation Factory, please visit:

http://www-935.ibm.com/services/us/cio/empower/feature.html

http://www-03.ibm.com/industries/telecom/doc/content/solution/2848769102.html

About China Telecom

China Telecommunications Corporation (China Telecom) is China's largest state-owned telecom operator organized according to China's telecom industry reform scheme. As a principal telecom enterprise and the biggest basic telecom operator of China, China Telecom owns the largest global fixed-line telephone network that covers cities and towns as well as the rural areas of China and penetrates to every corner of the world. Member units of China Telecom include 31 provincial (municipal and autonomous regional) enterprises which provide telecom services nationwide.

China Telecom's main businesses currently include: operating various kinds of domestic and international fixed-line telecom networks, including local wireless loops; providing telecom network-based voice, data, image, multimedia and information services; carrying out account settlements for international telecom services and developing overseas markets; carrying out some services which are related to telecom and information businesses such as system integration, technology development, technical service/advice, information service consultation, advertisement and publishing; production, sales, import and export of telecom equipment; designing and implementing telecom projects; operating other services which are required by the market development provided that provisioning of such services would have been authorized or permitted by the government of the country.

Made in IBM Labs

IBM has a network of more than 60 research and development labs around the globe that collaborate on advanced solutions for clients. IBM's laboratory population includes 28,000 researchers, developers and engineers. Twenty percent of them work directly with clients. In 2006, the labs conducted more than 10,000 engagements with clients.