Wake up call! creaf up $1.50 in spore
press conference at 4pm (spore time) to announce internet tie-up.
quote.bloomberg.com
Technology News
Thu, 23 Sep 1999, 1:59am EDT
Cable & Wireless HKT, Creative Tech to Set Up Singapore Internet Provider
By Linus Chua and Anjana Menon
Cable & Wireless HKT, Creative Tech to Set Up Singapore ISP
Singapore, Sept 23 (Bloomberg) -- Cable & Wireless HKT
Ltd., the dominant Hong Kong phone company, is setting up
Singapore's sixth Internet services provider with Creative
Technology Ltd., the world's biggest maker of computer sound
cards, people familiar with the agreement said.
The tie-up, expected to be announced at press conferences
later today, is likely to dash hopes by Singapore-based Flextech
Holdings Ltd. to join HKT's U.K. parent Cable & Wireless Plc to
provide Internet services on the island.
At stake is a slot in one of the fastest growing markets for
Internet services. Singapore businesses conducted Internet
commerce totaling S$1.2 billion ($707 million) in 1998, a figure
that's expected to see rapid growth as the city races to be the
first in the world to link every household and office to a high-
speed Internet network.
The HKT-Creative venture will also team two of Asia's
biggest technology companies, giving the Hong Kong phone
company a greater reach into the region. It will also give
Creative its biggest Internet investment since it set up a $50
million Internet fund.
``With Creative, they bring the brand name and some very
good management and very good ideas on how Singapore works,'
said David Leow, associate director at HSBC Securities Pte. in
Singapore. ``With HKT, they bring their telecom expertise and
their regional network.'
Creative shares rose 60 cents, or 3.6 percent, to S$17.30.
Cable & Wireless HKT, formerly known as Hong Kong
Telecommunications Ltd., rose as much as 70 cents, or 4
percent, to HK$18.50. It was recently trading at HK$18.30.
Competition
The move is also expected to intensify competition in
Singapore, where only three of the five Internet service
providers are in operation.
Singapore Telecommunications Ltd., the island state's
dominant phone company, and Pacific Internet Ltd., the first
Asian Internet company to trade on the Nasdaq exchange, now have
almost 90 percent of the market between them.
The two companies now compete head on, offering everything
from free phone calls while surfing on the web to free personal
computers and TV sets.
The third operator, which is owned by StarHub Pte.,
Singapore's second fixed phone line provider starting April, has
also beefed up services to compete.
Two days ago, MCI WorldCom Inc., the No. 2 U.S. long
distance phone company, said it won a license to be Singapore's
fifth Internet service provider.
DataOne (Asia) Pte., the fourth license-holder, is a joint
venture between Singapore Press Holdings Ltd. and Keppel
Telecommunications & Transportation Ltd.
Press Conferences
Precise details about the HKT-Creative tie-up are likely
to be revealed at press conferences later today by both
companies at 4 p.m.
In Hong Kong, HKT Chief Executive Linus Cheung will talk
about its regional expansion plans. An HKT spokesman declined
to be give details of the event.
Creative will hold its press event in Singapore. A company
spokeswoman declined further comment.
A director at Cable & Wireless Plc, HKT's U.K. parent,
said the company is eager to develop the company's Internet
business in Asia, although he wouldn't say which would be its
partner in Singapore.
``In keeping with Cable & Wireless' strategic focus on
Internet and data, we are actively looking at Internet
opportunities in the region,' said David Lee, Cable &
Wireless' Director of Operations, Southeast Asia and Indian
Ocean. ``It would be inappropriate for me to speculate as to
our position in regard to obtaining any local partners for an
ISP venture in Singapore.'
HKT made its first Internet expansion in the region in
March, buying control of Taiwan's FIC Network Service Inc. for
$5 million.
Singapore-based Creative has been eyeing Internet
investments as a new source of revenue as it faces more
competition for its products that enhance audio and graphics in
personal computers. It's also expanding that business to sell
its computer cards over the Internet, trailing the success of
direct sellers such as Dell Computer Corp.
``A lot of Creative's Internet strategy is multilayered,'
HSBC's Leow said. ``It can sell through the Internet and get
into Internet technology -- and the distribution of those
technology becomes easier with your own ISP.'
Flextech Fails
The Internet venture between Creative and Cable & Wireless
HKT will effectively end talks between Hong Kong company's
parent, U.K.'s Cable & Wireless Plc, and Singapore-based
Flextech Holdings Ltd., to set up an Internet services company
in Singapore.
``The discussions are conclusive -- we might not be doing
a deal with Cable & Wireless,' said Joseph Au, Flextech's
chief executive. ``It doesn't look like we're doing a deal with
Cable & Wireless.'
Flextech shares fell 7 cents, or 4.5 percent, to S$1.49,
after falling to S$1.47, its lowest in more than a month.
Global players have been seeking licenses to run Internet
service providers in Singapore after the country lifted
restrictions on foreign ownership for such ventures last week.
In Singapore, about a quarter of its 4 million residents
have access to the Internet either from home, school or work, one
of the highest penetration rate in the world. That's expected to
rise to three-quarters in 10 years, a government official said.
Is this the wake up call??
GO GO CREAF - PR |
