Regional Wireless' Ng: HK Mobile Mergers After 3G Auction
June 12, 2001
Dow Jones Newswires
HONG KONG -- The expected consolidation in the Hong Kong mobile industry isn't likely to happen until after the auction of third generation wireless licenses, which is expected in September, the head of Regional Wireless' Hong Kong operations said Tuesday.
"It looks like after the auction, since it is so close now," Hubert Ng, chief executive of CSL Ltd., told reporters at a 3G World Congress. "Even though there might be discussions already, the announcement won't come until after the licenses are allocated," he added.
There has been speculation that some of Hong Kong's smaller operators might team up before the auction to be able to better compete with the larger operators. There has also been talk that some overseas operators might come in and bid for one of the smaller Hong Kong carriers.
Ng noted however, that the market price that shares of mobile operators trade at now is low and the sellers aren't willing to sell at this current price. At the same time, he said, the buyers aren't keen to pay a high premium either.
However, people who don't get a license will need to strengthen their positions and that is likely to spark a wave of consolidation, he said.
There are also a few key issues that need to be sorted out before the first acquisitions can take place, one of which is whether the buyer of an operator with a 3G license will be allowed to retain the spectrum, Ng said.
Separately, he projected that the Hong Kong 3G license "won't be expensive" based on the developments in Singapore, where there are only three bidders for four licenses and also based on predictions that license price in Taiwan will fall.
The Hong Kong government is planning to allocate four 3G licenses in September through an auction preceded by a screening process. Participants in the auction will bid a percentage of their future 3G revenue for the licenses, as opposed to offering a lump sum to be paid upfront.
Regional Wireless is a 60-40 joint mobile venture between Australia's Telstra Corp. (TLS) and Hong Kong's Pacific Century CyberWorks Ltd. (PCW). Through CSL it is also one of Hong Kong's six existing mobile operators.
-By Anette Jonsson, Dow Jones Newswires; 852-2802-7002; anette.jonsson@dowjones.com
-0- 12/06/01 06-58G
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