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.

Microcap & Penny Stocks : LGOV - Largo Vista Group, Ltd. -- Ignore unavailable to you. Want to Upgrade?

To: Evan who wrote (3225)	3/9/1999 9:11:00 AM
From: jmhollen	Read Replies (1) \| Respond to of 7209

Gee, I wonder if telecommunications are important in China....??? ************************************************* Hongkong Telecom, Microsoft link to transmit software to PCs By Christina Mungan THE WALL STREET JOURNAL HONG KONG — Microsoft Corp. and Hong Kong Telecommunications Ltd. will team up to deliver movies, software and video games to personal computers in Hong Kong via the world's largest broadband Internet service, said people at both companies. ANTICIPATION OF THE DEAL has pushed Hongkong Telecom's shares up 15% in the past two trading days, adding HK$23 billion (US$2.97 billion) to the market value of a company that collected HK$35 billion in revenue for the year ended March 31. Microsoft chairman Bill Gates and Hongkong Telecom Chief Executive Linus Cheung plan to announce a “strategic alliance” in Hong Kong Tuesday as Mr. Gates stops off on his way to China and Japan, executives at both companies said. Neither side would confirm specific details of the plan or value the deal, which teams the world's biggest software producer with Hong Kong's largest telephone company in a program likely to take years to come to full fruition. But sources at Microsoft said the plan marks a key step toward what the industry calls convergence, a world in which television sets and PCs would be equally able to access video on demand, electronic shopping and other services through telephone lines, and software would be located on Internet-based servers rather than the hard drives of individual workstations. Hongkong Telecom started offering video on demand and shopping services a year ago through TV sets. Redmond, Wash.-based Microsoft is vying with rivals such as International Business Machines Corp., AT&T Corp. and Sony Corp. to create an industry standard for delivery of video and other data across the Internet to PCs. For Microsoft, Hong Kong is an ideal market to test potential demand for new services. Through Hongkong Telecom's existing television-based video-on-demand service, the city already enjoys one of the world's most extensive fiber-optic networks to support that technology. Only Singapore, with a population half the size of Hong Kong's, boasts a similar network. For Hongkong Telecom, the deal comes at a time when competition is slashing revenue from other services such as international direct dialing, and could boost demand for its multimedia business, which already includes the world's biggest video-on-demand and high-speed Internet services. Hongkong Telecom has invested HK$1.4 billion in the past four years to link 70% of Hong Kong's 1.9 million households to the fiber-optic network through which it already delivers video on demand, electronic shopping and banking services through set-top boxes to home TV sets. EXPANDED SERVICES “If we have it our way, this network will become the backbone of Hong Kong, not just of Hongkong Telecom,” said the company's chief executive of multimedia services, Allen Ma, in an interview at the end of February. Hongkong Telecom and Microsoft now aim to come up with services — such as PC-based video on demand and games — that would take advantage of the extra speed the network makes possible, according to people at both companies who asked not to be named. Microsoft's deal with Hongkong Telecom may include the capability to rent, or temporarily access, software on the Internet without downloading a permanent copy, according to the South China Morning Post newspaper. That prospect — which couldn't be confirmed — would represent a big step toward convergence and also have the side effect of thwarting software pirates. LIMITED ATTRACTION SO FAR In any case, the immediate scale of the two companies' cooperation could be small. While Hongkong Telecom has signed up 80,000 subscribers for its television-based video-on-demand service, appetite for its high-speed Internet service appears more limited. Just 12,000 of its video-on-demand customers have opted for the add-on Internet service that links their set-top boxes to their PCs, allowing data to be downloaded up to 30 times faster than with conventional dial-up Internet services. Also, though the two companies hope to launch some services by year end, they haven't locked into a specific date, according to a person at Hongkong Telecom. “I don't see that there will be any clear, immediate benefits to Hongkong Telecom at all,” said Stanley Tang, an analyst at Tai Fook Securities Co. Hongkong Telecom's stock is soaring because the company's tie-up with Microsoft is causing investors to speculate that it may warrant the sky-high price/earnings multiples commanded by U.S. Internet stocks, not because of any likely immediate boost to its earnings, Mr. Tang said. He recommended investors take advantage of the rally in the stock to sell.