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Technology Stocks : PCW - Pacific Century CyberWorks Limited -- Ignore unavailable to you. Want to Upgrade?

To: ms.smartest.person who wrote (687)	3/26/2001 6:29:46 PM
From: ms.smartest.person	Read Replies (1) \| Respond to of 2248

Telecom also-rans struggle to stay in game By Kevin Morrison and Cosima Marriner Shares in Hutchison Telecommunications (Australia) were sold off sharply yesterday in the wake of the successful bid by Singapore Telecommunications for Cable & Wireless Optus, which will force it to reconfigure its expansion plans. Its shares fell 12c to close at 86c as shareholders reacted negatively to the SingTel bid. Losing bidders for Optus - Vodafone Pacific, Hutchison Telecommunications Australia and Telecom Corp of New Zealand - are expected to reshape their strategies in the face of the changing competition realities, with industry wide rationalisation expected to pick up speed in the coming months. Telecom analysts said that with little room to move, Vodafone is resigned to being a distant third player in the local mobile phone market, a position that does not fit with its parent Vodafone Airtouch Plc's strategy of being number one or two in each market it operates in. It is also unlikely to make another attempt at a sharemarket float, after abandoning its float last May, although this may leave Vodafone Pacific to focus on expanding in the region. Its chief executive Dr Brian Clark is responsible for the group's expansion in South-East Asia. Hutchison, controlled by Hong Kong's Hutchison Whampoa, is now faced with expanding its mobile subscriber base organically rather than under the Vodafone/Optus merger plan, through which it was to acquire one million Optus customers. This would have bumped Hutchison up to number three position in the mobile market from its present fifth place. Hutchison is in the process of outlaying large sums on mobile networks. Already rolling out its Orange One CDMA network, the company has also spent $867 million on acquiring 2G and 3G mobile spectrum. "Hutchison spent more than its market capitalisation just acquiring licences," said Burdett Buckeridge Young analyst Mr Mark McDonnell. It is understood that Hutchison still revive talks with Telecom NZ, which is looking to become a major mobile operator in Australia. This could lead to a merger of the CDMA mobile assets of the two carriers. Corporate advisers have said that many telecom players were waiting for the Optus takeover situation to be resolved before the next wave of industry consolidation as telecom companies face an investment community that is no longer prepared to throw money freely at them as it did 18 months ago. Telecom analysts said this drought in capital supply has forced telecom companies to seek to merge and create larger companies with greater scale in order to survive during an economic downturn. Analysts yesterday described SingTel's entry into the Australian market as a preservation of the status quo, with SingTel assuming Optus's place as second to Telstra. But they said that, with five operators, the mobile market faced rationalisation as the market became saturated. "The fundamental issue is how many separate mobile networks can Australia support?" said Burdett Buckeridge Young analyst Mr Mark McDonnell. Optus's other vanquished suitor, Telecom New Zealand is likely to concentrate on expanding its corporate voice and data business, but it could benefit from the SingTel takeover of Optus, as it triggers its pre-emptive right to buy Optus's 40 per cent interest in the Southern Cross undersea cable network. Telecom analysts said the Optus takeover by SingTel was another step in a wider regional trend, the emergence of larger pan-Asian carriers. Last year Telstra took a step to become a regional player with the tie-up with Pacific Century CyberWorks, the owner of Hong Kong Telecom. "We are seeing industry rationalisation driven by the Asian carriers, as the US and European carriers withdraw from the region," said Mr Paul Richardson, telecom analyst at UBS Warburg. smh.com.au