SYDNEY, Australia-Australia’s Telstra Corp. and Hong Kong’s Pacific Century CyberWorks released details regarding their previously announced alliance to establish a mobile company and an Asian Internet Protocol network.
The announcement follows the completion of PCCW’s merger with Cable & Wireless HKT, the Hong Kong mobile carrier, earlier this month.
“The natural fit of geography, vision, people, skills and assets between our two companies creates in a very short time a powerful new force in Asian and potentially global communications,” said Ziggy Switkowski, Telstra’s chief executive officer.
The companies will form three joint-venture companies, two headquartered in Hong Kong. Telstra will contribute $1.5 billion in cash for its holding in a regional wireless joint venture, which is one of the three companies.
The wireless company will aim to establish a pan-Asian presence through alliances and commercial agreements. PCCW will hold 60 percent of the new company, with Telstra having the option to equalize its 40-percent holding within 18 months. Telstra is not contributing mobile company assets, while PCCW brings its Hong Kong wireless business.
The other two companies include an equally held regional Internet/data company that will carry voice and data traffic in Asia, excluding Japan. The third company is a data centers joint venture, which will operate a network of data centers throughout the Asia-Pacific region.
Telstra is also investing $1.5 billion in a PCCW convertible note, repayable to Telstra with interest if redeemed. The note is convertible into PCCW shares and is transferable after 24 months.
Telstra and PCCW expect to finalize the alliance documents later this year, in addition to working though staffing and management appointments.
