SingTel, News Corp. venture on, but $1B gone

Singapore Telecommunications (SingTel) and News Corp. will continue to explore jointly the development of broadband Internet and wireless businesses throughout Asia, despite SingTel failing to acquire Cable & Wireless HKT.

But News will not carry through on its plan to invest $US1 billion in SingTel, as that investment was conditional on SingTel prevailing in the bid for the Hong Kong carrier, SingTel said in a statement yesterday.

The two companies are continuing to pursue investment opportunities, and discussions are under way regarding a final structure of the alliance, SingTel said in the statement.

The companies are to pursue opportunities in Internet access, including acquisition and creation of a number of regional ISPs; broadband delivery, including an interactive TV and video-on-demand service in Singapore and the region; and the development of a mobile Internet portal to be applied across SingTel's wireless businesses in Asia.

Meanwhile, UK-based Cable & Wireless PLC, majority owner of Hong Kong's incumbent telecom carrier Cable & Wireless HKT (C&W HKT), has accepted Pacific Century CyberWorks' (PCCW) bid to merge with the carrier.

PCCW Vice Chairman Francis Yuen was quoted as saying the deal required only the approval of C&W HKT's board in Hong Kong. CyberWorks officials could not be reached for comment.

Meanwhile, PCCW reportedly told analysts that PCCW would buy 100 percent of C&W HKT, creating a company with a market capitalisation of $US70 billion, to be called PCCW-HKT. Reports said that PCCW Chairman Richard Li and his associates will hold 37 percent of the merged company and Cable & Wireless will hold 20 percent. Other shareholders include PCCW shareholder Intel Corp. as well as China Telecom Ltd., a Beijing state-owned enterprise. China Telecom holds a significant minority stake in C&W HKT.

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