NEW YORK-Hongkong Telecommunications Ltd. announced Jan. 20 it will terminate its exclusive international telecommunications license March 31 in exchange for a cash payment of $865 million from the Hong Kong Special Administrative Region government.
“With the more certain regulatory environment, Hongkong Telecom can focus on developing its existing services, growing its mobile businesses and advancing the delivery of … interactive multimedia, business broadband and enhanced value-added services,” Linus W.L. Cheung, chief executive officer, said.
In December, Hongkong Telecom acquired full ownership of Pacific Link Communications Ltd., adding 270,000 cellular subscribers in Hong Kong to its 530,000 customers there.
“In addition, we will continue to explore new investment opportunities in Hong Kong, mainland China and the Asia Pacific region,” Cheung said.
The Hong Kong government plans to issue licenses for competitive external telecommunications services that will take effect on Jan. 1, 1999, and for facilities-based competition to provide external services that will become effective on Jan. 1, 2000. Until those competitive licenses go into effect, Hongkong Telecom will continue to be the exclusive provider, and afterward will provide these services on a non-exclusive basis.
“This agreement balances the interests of all stakeholders and provides fair compensation to Hongkong Telecom for giving up a valuable asset,” Cheung said.
