NEW YORK-Hong Kong Telecommunications Ltd., the dominant carrier in the Chinese territory, signed a binding agreement Jan. 1 to purchase Pacific Link Communications Ltd. for $623 million. Pacific Link is the fourth-largest mobile telephone operator in Hong Kong.
Hongkong Telecom said the acquisition will add two networks and 265,000 subscribers to its existing cellular operations. Pacific Link also has a fledgling personal communications services operation, an important asset for Hongkong Telecom, which wasn’t selected in one of the latest rounds of PCS license awards.
The territory of Hong Kong has 11 wireless telecommunications networks covering a population of 6 million, with a penetration rate of approximately 20 percent. Price wars due to competition have eroded profit margins for wireless carriers, leading to speculation that the Pacific Link acquisition marks the beginning of a round of corporate consolidation.
Pacific Link is 65-percent owned by First Pacific Group, an Asian conglomerate, and 35-percent owned by London-based Vodafone Group plc. Both companies are selling their entire stake in Pacific Link to Hongkong Telecom.
The acquisition is expected to close by the end of this month.
