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

To: ms.smartest.person who wrote (1090)	4/18/2001 6:34:18 PM
From: ms.smartest.person	Read Replies (1) \| Respond to of 2248

H.K. Phone Regulator Wants Right to Approve Mergers (Update1) By Cathy Chan Hong Kong, April 18 (Bloomberg) -- Hong Kong's phone regulator said it wants to change the law to make it more difficult for telecommunications network operators to merge in order to prevent the creation of monopolies. Under the proposal, fixed-line and mobile network license holders would need permission from the Office of the Telecommunications Authority for transactions involving 15 percent or more of their shares. Rate cuts and falling subscriber growth have cut into the profits of smaller mobile phone service providers, leaving them prey for takeovers by larger operators. The new rules would effectively require investigation of any merger. ``Should the number of players not decline, mobile operators will continue to suffer from excessive competition and continuous declines in pricing,'' said Wallace Cheung, analyst at DBS Securities. In a consultation paper, the authority said any attempt to merge telecom operators with a combined 15 percent or more or the market will ``prompt regulatory concern'', should the current top four companies continue to share three-quarters of the market. Mergers of companies with a combined market share of 40 percent or more will be viewed as anti-competitive. The rules become more stringent should the combined companies control 75 percent or more of the market, the authority said. ``The government would not wish to see the level of competition to be significantly diminished by mergers and acquisitions,'' the authority said in a press release. Hong Kong has no antimonopoly regulation for other industries. The four biggest operators, Hutchison Whampoa Ltd., Pacific Century CyberWorks Ltd., SmarTone Telecommunications Holdings Ltd., New World Development Co., together served 83 percent of the city's 5.3 million mobile users at the end of 2000. Even a merger of the two smallest operators, Peoples Telephone Co. and Sunday Communications Ltd., would lead to regulatory intervention. People's had about 10 percent of the market and Sunday about 7.7 percent at year-end. Still, the authority said it wouldn't automatically reject all mergers and would take into consideration others factors such as barriers to new operator entry. The authority said it may issue more licenses to ensure sufficient competition. The government said earlier it won't allow more than one company controlled by the same shareholders to bid in an auction high-speed wireless telecommunication licenses later this year. Consultation on the proposals will end on June 12. quote.bloomberg.com