While Telstra's deal to take a 40 per cent stake in Solution 6 may appear to be on shaky ground as a result of recent stock market volatility, the carrier's $5 billion investment with Hong Kong internet company Pacific Century CyberWorks still looks set to go ahead.
Speaking on Channel Nine's Business Sunday program yesterday, Richard Li's right hand man and PCCW CEO Alex Arena said the deal between PCCW and Telstra would "absolutely" go ahead, even if the Internet company's plans to merge with Cable & Wireless Hong Kong fall apart.
The deal, which is conditional on PCCW's $64 billion merger with Cable & Wireless Hong Kong, would see the companies create two pan-Asian joint ventures: one for mobile communications; and one for wholesaling cable capacity.
"We're very happy with the Telstra deal. I think all parties are very happy with the Telstra deal," Arena said.
Whilst the deal represents Telstra's first foray into Asia, Arena said the partnership was an important international step for PCCW.
"We wanted to bring our services to Australia. We've been looking for an Australian partner and Telstra is an extremely good partner for us , we'll continue those discussions," he said.
In addition to the two joint ventures, Arena said the partnership with Telstra would create more opportunities for PCCW including the provision of business services throughout the region, the creation of an HTML/Internet content facility in Australia, and a local distributor for PCCW's broadband internet service, Now.
Arena downplayed concerns that the merger with HKT was "on shaky ground", and that News Corp and Singtel were planning to relaunch a bid for the Hong Kong carrier after being pipped at the post by PCCW last month.