CyberWorks, Telstra Plan Regional Alliance

HONG KONG (04/12/2000) - Australian telecommunications carrier Telstra Corp. today confirmed it is in talks with Pacific Century CyberWorks Ltd. (PCCW) the aggressive Hong Kong Internet company, on creating an Asia-Pacific alliance.

Under the deal, the companies would pool assets and cash to form a number of joint ventures across the region, according to a Telstra statement to the Australian Stock Exchange. It would be contingent on the completion of PCCW's planned acquisition of Hong Kong carrier Cable & Wireless HKT, the statement said.

Trading in shares of both companies were suspended pending an announcement planned later today, the companies stated in stock exchange disclosures.

Telstra, still a giant in the deregulated Australian telecom market, recently has begun expanding its business into application service provider and other operations, and beyond Australia's borders into the region, according to news reports.

If PCCW's buyout of C&W HKT is approved by shareholders in the next several months as expected, the company will have gained a sizable fixed-line and mobile telephony business in addition to the carrier's broadband network, which PCCW plans to use for its Network of the World multimedia entertainment and information service.

Many industry observers have speculated that PCCW would eventually shed some of these units after the acquisition, though PCCW representatives have said this will not happen in the near term.

Representatives of the two companies could not be reached for comment regarding the alliance.

Telstra, in Melbourne, Australia, can be reached online at http://www.telstra.com. PCCW, in Hong Kong, can be reached at +852-2514-8888 or online at http://www.pcg-group.com.

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