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To: ms.smartest.person who wrote (50)	10/16/2000 6:04:15 PM
From: ms.smartest.person	Respond to of 5140

WSJ Business and Finance - Asia CyberWorks, Telstra Venture Aims To Provide Pan-Asian Brand, Service By GREN MANUEL Staff Reporter of THE WALL STREET JOURNAL The mobile-phone venture formed by Pacific Century CyberWorks Ltd. and Telstra Corp. of Australia is aiming to build the first pan-Asian mobile-phone network in which branding and service will be uniform across countries. The ambitious plan is one of several that CyberWorks disclosed on Monday in an announcement to shareholders after last week's multibusiness alliance with Telstra. The deal will help CyberWorks reduce its group debt by US$3.6 billion and create regional alliances in the fast-moving mobile and data sectors. CyberWorks stock, suspended as the details of the alliance were announced on Friday, had a wild day of trading on Monday as investors struggled to digest news of the deal. When trading resumed, CyberWorks shares opened 11% higher at 8.50 Hong Kong dollars (US$1.09) on positive brokerage reports and a 7.9% rise in the Nasdaq Composite Index on Friday. Throughout the day, however, CyberWorks shares collapsed as short-sellers moved in, closing down 5.9% at HK$7.20 each. Hong Kong's Hang Seng index rose 2% to 14973.40. The plan for a pan-Asian network would be a novelty to consumers in Asia, which has fallen behind Europe in forming cross-border mobile-phone systems. Alex Arena, deputy chairman of CyberWorks' executive committee, said cross-border alliances, acquisitions of existing operators, and bidding for fresh spectrum as it is released by governments could all be used to create a service that looked the same to consumers regionwide. "The consumer wants to use his handset from place to place. There are many ways to do that," he said. Mr. Arena said the venture formed last week between CyberWorks and Telstra would start life debt-free and could therefore borrow to fund the strategy. Brands used in Hong Kong could be exported or new ones created, he said. He declined to estimate the cost of the strategy. CyberWorks will initially own 40% of the company. Under Hong Kong accounting rules, this means that any debt won't appear in CyberWorks' accounts. Telstra will initially own the remaining 60% of the company. Management has talked about the possibility of a flotation next year, but analysts have said the timing of such a move would be highly dependent on the global appetite for the stock of mobile-phone companies. "We are giving the [new company] a good head start so it will be able to achieve its own financing," Mr. Arena said. "And by going to an IPO it would be able to generate yet another source of funds." The two firms are striving to make a CyberWorks stake in Mobile One, a mobile operator in Singapore, part of the joint venture. Transfer of the effective 15% stake is complicated because of a multilevel shareholding agreement that brings in Cable & Wireless PLC of Britain, the former parent of Hongkong Telecom. CyberWorks bought Hongkong Telecom in August. Mr. Arena said negotiations were "friendly," but that they were complicated by rapidly shifting valuations of mobile-phone companies. CyberWorks is also talking to telecommunications companies in the U.S. and Europe about linking up with the international data business it has created with Telstra. However, he said there is no desire to create a branded communications company through alliances. The joint-venture company would concentrate on providing wholesale data services to other carriers, Mr. Arena said. Write to Gren Manuel at gren.manuel@awsj.com2 -------------------------------------------------------------------------------- URL for this Article: interactive.wsj.com Hyperlinks in this Article: (1) interactive.wsj.com (2) mailto:gren.manuel@awsj.com -------------------------------------------------------------------------------- Copyright © 2000 Dow Jones & Company, Inc. All Rights Reserved. Printing, distribution, and use of this material is governed by your Subscription Agreement and copyright laws. For information about subscribing, go to wsj.com *Used with permission from the Wall Street Journal Interactive Edition.*