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

To: ms.smartest.person who wrote (991)	4/5/2001 8:32:59 PM
From: ms.smartest.person	Read Replies (2) \| Respond to of 2248

AWSJ: Telstra-PCCW Venture Plans Bid To Acquire MobileOne Updated: Thursday, April 5, 2001 04:44 PM ET Staff Reporter HONG KONG -- Regional Wireless Co., a joint venture between Australia's Telstra Corp. and Pacific Century CyberWorks Ltd., intends to bid for Singapore's No. 2 cellular provider, MobileOne Ltd., heating up the battle by telecommunications operators vying for a regional footprint. The move by the two-month-old venture, owned 60% by Telstra and 40% by PCCW, is a possible counterpunch to last months' unveiling of Singapore Telecommunications Ltd.'s bid to buy Australia's second-largest mobile-telephone operator, Cable & Wireless Optus Ltd. "The Regional Wireless Co. is interested in the shares of MobileOne," said Hubert Ng, the chief executive of Hong Kong CSL Ltd., currently the sole telecommunications operator under the venture. "The company plans to bid for the shares," he said, adding that the board had already decided on the issue. Mr. Ng didn't specify a time frame or how much it would bid. Estimates vary widely, but based on its approximately half a million subscribers, MobileOne is valued at between US$1 billion and $1.8 billion. MobileOne's shareholders said Wednesday they were discussing a possible coordinated sale of their stakes. Some analysts said MobileOne's expected financial burden to deploy third-generation wireless technology was the key factor in a possible share sale. Strikingly, a bid by the venture would come at a time when one of its backers -- PCCW, which already owns 15% of MobileOne -- is stung with a tumbling share price and heavy debt from its $29 billion acquisition of Cable & Wireless HKT last year. Yet officials at PCCW confirmed the venture's desire to acquire MobileOne, and explained that it would be able to ease any financial obligation by using the 15% stake in the operator that it already owns. MobileOne's shareholders "have decided to exit the mobile market in Singapore and have authorized the board of MobileOne to seek investors for the sale," said Joan Wagner, a PCCW spokeswoman. A possible sale comes as wireless operators have been hard hit by ultra-low valuations in global capital markets. Ravi Vijayaraghavan, a telecommunications consultant with Bain & Co. in Singapore, said MobileOne's existing shareholders may want to exit the sector before the financial burden of building a third-generation mobile network further adds debt to MobileOne's balance sheet. If there is a perception of a big capital expenditure coming on, "they might not want to put in those capital commitments," he said. By selling all the stakes at one time, the sellers would likely earn more than if they sold it piecemeal, Mr. Vijayaraghavan added. MobileOne is owned by Singapore-based Keppel Telecommunications & Transportation Ltd. and Singapore Press Holdings Ltd., which each have 35% stakes in the company. The remaining 30% stake is owned by a holding company 51% controlled by Cable & Wireless PLC of the U.K. and 49% by PCCW. The sale creates an opening for Regional Wireless, which was formed in February with the goal of creating a pan-Asian mobile-telephone player. At the moment, it only has one flag planted in the region with Hong Kong CSL, the former PCCW unit that is Hong Kong's second-biggest mobile-telephone operator. Like Singapore Telecommunications, the lead joint venture's partner, Telstra, wants to expand beyond its mature and increasingly competitive home market by making use of a war chest accumulated as a dominant former monopoly. But while the chance to take 100% control of an established operator is rare, some analysts question the strategic value of a presence in Singapore. MobileOne "is in a saturated market, and there isn't much room for growth," said Nick Ingelbrecht, a Sydney-based telecommunications analyst with Gartner Group Inc. Mobile-phone penetration in Singapore is already more than 65%, and deregulation has thinned margins, he says. quicken.com