Australian telecommunications company New Tel has announced plans to launch an Internet service and Web portal service in China. The site will be launched in association with Xinhua Holdings, the Hong Kong-based commercial arm of China's state-run Xinhua news agency.
New Tel, which until June was known as Transcom International, will provide service in all 28 provinces of Mainland China and hopes to attract 2 million subscribers by 2003. "By setting up an ISP (Internet service provider), we are looking to deliver the AOL (America Online Inc.) of China," said Peter Malone, chief executive officer of New Tel.
On the portal side, the company said it plans to offer access to a large database of information both from Xinhua and obtained from official sources through its link with the Chinese news agency. "It will be aimed at people internationally looking for information from China. We have, through the news agency's links, access to substantial content on the China market," said Malone. The service is expected to debut in March 2000.
As part of the deal to form the Chinese Internet venture, Xinhua Holdings will create a new company to become the owner of a number of Internet and related interests in China. New Tel will then acquire the new company through the issue of 200 million shares to Xinhua, which will make Xinhua a 49-percent owner of New Tel.
New Tel has already raised $A5 million ($US3.2 million) of the A$20 million it intends to raise to provide working capital for the company and will later seek to raise a further $A200 million on the Nasdaq market to fund the development of the business.
The Australian company is already working with Xinhua Holdings in the telecommunications field. It previously established a telecom joint venture, Xinhua News Telecommunications, to offer low-cost telephone service from Australia to China. In addition, Zhou An, group managing director of Xinhua Holdings, sits on New Tel's board of directors.