Hong Kong-based Pacific Century CyberWorks last Thursday acquired Hutchison Corporate Access, a provider of private satellite-based data communications networks, by acquiring holding company Hutchison Telecommunications Technology Investments for about HK$803 million (A$194 million) in new PCCW shares. HCA offers a service that lets companies exchange data among offices via VSAT (very small aperture terminal) rooftop satellite dishes. It serves about 200 multinational corporations in more than 40 countries in Asia, according to a PCCW statement. It leases capacity on 15 satellites.
The acquisition will help PCCW to speed up the expansion of its services across the region, the company said. HCA's satellite-based services will complement Reach, PCCW's existing Asian fiber-optic backbone joint venture with Australian carrier Telstra Corp., and its last-mile telecommunications services. PCCW is the largest fixed-line telecommunications carrier in Hong Kong and already offers DSL (digital subscriber line) broadband service here.
HCA was founded in 1994 by Richard Li's Pacific Century Group and sold to Hutchison in 1995 for HK$581 million. It earned a profit of HK$14 million last fiscal year, according to PCCW.
Hutchison sold the satellite operation because it wants to focus its business on mobile-phone services throughout Asia, according to a company statement.
However, there has been speculation in Hong Kong that the deal represents a bid by the elder Li to boost his son's company. Shares of PCCW (HK:0008) -- like those of many Internet-related companies -- have fallen to a small fraction of their value at the time of the HKT acquisition. Late Friday afternoon, the shares had risen HK$0.15 to $4.525. Concerns have been raised recently over how Cable & Wireless PLC may dispose of a 7.5 percent chunk of the company.
Contrary to Hutchison's stated reason for disposing of the company, "investors know that it really represents a small business link-up between father and son," said a commentary on local finance portal Quamnet, operated by Quam (IA) Ltd.
PCCW was founded as an Internet holding company in 1999 and last year acquired Cable & Wireless HKT Ltd., the territory's former incumbent fixed-line telecommunications carrier, from Cable & Wireless PLC. Its chairman, Richard Li, is the son of Li Ka-Shing, who controls HCA's parent company, Hutchison Whampoa Ltd. The purchase, paid for with newly issued PCCW stock, will give Hutchison Whampoa a stake of about 0.83 percent in PCCW.
PCCW, in Hong Kong, can be reached at +852-2514-8888, or via the Web at http://www.pccw.com/.