Cable & Wireless has ended months of speculation and announced it is to sell a potentially significant share in its Hong Kong Telecom subsidiary to the main telecomms operator in China.
It will sell 5.5 per cent of its 59 per cent stake in the Hong Kong telco to China Telecom, the major operator controlled by the Ministry of Posts and Telecommunications. The mainland operator will pay HK$14.25 per share. Cable & Wireless expects to transfer further shares to its new partner until they become equal shareholders in Hong Kong Telecom.
The deal is expected to significantly strengthen Cable & Wireless? operations in Asia as it will give access to a lucrative market that has, so far, been closed to foreign investors. Last year, 51.9 million main lines were installed in the country, but only 4.2 per cent of the 1.2 billon-strong population had access to them, according to figures from Analysys.
China Telecom is also offering Cable & Wireless the unique opportunity to be the major telecomms investor in China Telecom (Hong Kong), which was set up to develop activities in Hong Kong and China.
Richard Brown, C&W's chief executive, said: ?Cable & Wireless and China Telecom are forging a unique long term alliance to develop telecommunication operations in Hong Kong and China. We are delighted to welcome China Telecom as a significant new shareholder in Hong Kong Telecom.?
Minister Wu Jichuan, of the Chinese Ministry of Posts and Telecommunications, said: ?Hong Kong Telecom has a lot to offer China Telecom in terms of technology and personnel expertise, and China Telecom in turn has vast opportunities in China?s telecomms market to offer Hong Kong Telecomm and Cable & Wireless.?
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