Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Pacific Century CyberWorks (PCW, PCWKF) -- Ignore unavailable to you. Want to Upgrade?

To: ms.smartest.person who wrote (2588)	9/20/2000 3:50:02 PM
From: ms.smartest.person	Respond to of 4541

<FYI, an old 4/13/00 article> Behind the Telstra Deal 13th April 2000 PCCW yesterday announced a highly conditional Memorandum of Understanding with Telstra in which it has agreed to sell a 40% interest in something it doesn't yet own, the C&W HKT wireless business. The deal also includes a US$1.5bn convertible loan from Telstra. The deal was billed as a "strategic alliance" but on closer inspection, the core of it is simply the HKT asset pre-sale. Telstra has only modest mobile investments in Asia, which would be contributed into the "Regional Mobile Company" (RMC) which would be 40% owned by Telstra and 60% by PCCW-HKT. Therefore the bulk of Telstra's 40% stake would be paid for by purchasing a stake in the JV for cash payable to PCCW-HKT, currently estimated to be US$1.5bn. This money will then be used to pay down part of the US$12bn of debt which PCCW will use to complete the merger with C&W HKT. In addition, Telstra and HKT would pool their international submarine cable and related assets into a jointly held company. That's no great news because little if any cash will change hands. Most of the World's undersea cables are owned by consortia of multiple telephone companies which then lease capacity on those cables, so the "IP Backbone Company" will just be a pooling of such contractual interests along with some other hardware. Very few operators own entire major cables outright. To see what we mean, click here for information on the recent SEA-ME-WE3 cable consortium. Other aspects of the announcement were just window dressing, for example, the forthcoming PCCW "Network of the World" channel will be made available to Australians. But that was always the case - it is on the internet, which anyone can access. Indeed it will have to be free, because Telstra is largely prohibited from being involved in pay-TV operations due to a non-compete arrangement with Foxtel, of which it owns 50%. The rest is 25% is owned by Kerry Packer's Publishing and Broadcasting Ltd and 25% by Murdoch's News Corp. Another extraneous part of the deal was that they are going to "aggregate Australian HTML content for global distribution" which to us sounds like a search engine. And Australian content is already available globally - that's how the net works. The entire Telstra/ PCCW deal is conditional, amongst many things, on completion of the acquisition of C&W HKT. What does Telstra bring? For rest of article, click on link webb-site.com