SingTel's Chief Discusses Plans For Potential Expansion in Asia
April 30, 2001
Tech Center
By H. ASHER BOLANDE
Staff Reporter of THE WALL STREET JOURNAL
Prior to its bid for Cable & Wireless Optus Ltd., Singapore Telecommunication Ltd.'s overseas strategy was to tap into Asia's less-developed markets, where the growth potential was far greater than in countries with a more mature telecom market. During an interview last week, SingTel chief executive Lee Hsien Yang explained the company's strategy in other economies in Asia, its interest in cellular telecom companies (referred to as cellcos), and the challenges it faces going forward. Below is an edited transcript of his comments.
Q: Right on your back doorstep, you have a potentially giant market that is deregulating fast in India. What are your plans there?
1 SingTel Takes Prgamatic Approach to Takeover of Australia's Optus (April 30)
A: In India, we've been very public. In August last year, we made a sizable investment in Bharti [Bharti Telecom Ltd.].
We have actually looked at India for a long time. [In] the first round of their cellular licenses given several years back, we actually bid in it. We were the number-two bidder in one of the cellcos in the south, in Tamil Nadu. The Indian government said we had a right to build a network if we wanted to pay the same price as the number-one bidder, who had paid double what we bid for our license. We reckoned there was no justification, and we declined that privilege.
Q: Would you rather be more weighted toward India or toward China at this point?
A: "I think at this moment in time, China is not open. There are no real opportunities for an operator to gain entry and have any significant involvement of the operation of the telecom industry in China.
Q: So India, by comparison, looks more interesting?
A: For now, we have invested more into India -- that's because the opportunities are there. I think the Chinese market is tremendously interesting, but until the government permits involvement and investment instead of just being a passive financial investor and taking 1% to 2% in some of the Chinese entities, it's not really very meaningful.
Q: SingTel bid for HKT last year (which it lost to Pacific Century CyberWorks Ltd., whose shares have since fallen roughly 80% from their 52-week high). Does the company count its blessings that it didn't make that acquisition?
A: The underlying operations in HKT have been reasonably strong, and a lot of the problems that they've faced have been the result of debt they had to incur as a part of that transaction. You are comparing apples and oranges ... in terms of what might have happened or might not have happened in Hong Kong.
Write to H. Asher Bolande at hyam.bolande@awsj.com2
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