Bid for second license in Singapore
Cable and Wireless Plc, Britains second biggest telecommunications company said on Wednesday it had lifted annual pre-tax profits by 12 per cent to a record 1.42 billion pounds ($2.3 billion).
The company, which lifted its total dividend 11 per cent to 11.1 pence for the year to March 31, said improved demand in its businesses around the world and a firm management focus on productivity enhancement had boosted performance.
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Balanced global growth is our objective, said chief executive Richard Brown in the results statement. We are focusing on major opportunities where we can build service in depth and exercise real operating influence.
We are seizing opportunities to expand our revenues in fresh, innovative ways, he added.
The groups jewel in the crown a near 60 per cent stake in lucrative Hong Kong Telecommuni-cations Ltd increased its links to the potential huge growth opportunity of China last week when a stake was transferred from a more independent Chinese firm to one which analysts say reports directly to Chinas State Council.
Analysts say that although the transfer of a 7.7 per cent stake from CITIC Pacific to China Everbright is not a big deal, there make be further Chinese investment in Hong Kong Telecom, combined with new opportunities for the company on the Chinese mainland.
A China deal might also incorporate a tie-up with a global alliance, some analysts say. Global One, the partnership between Deutsche Telekom AG, France Telecom and Americas Sprint Corp has been in talks with C&W needing access to both the British and Asia markets.
Alan Cane
Cable and Wireless, the UKs second-largest telecommunications group, and Hongkong Telecom, its majority-owned subsidiary, have joined the battle for Singapores second national telecommunications licence. In conjunction with The Keppel Group, the Singapore-based industrial conglomerate, and Singapore Press Holdings, the two companies are bidding for a fixed-wire licence to operate from April 2000.
A consortium with the same partners, called MobileOne (M1), launched Singapores second mobile network last month. Richard Brown, C&W chief executive, said on Tuesday a fixed-wire licence would enable us to dig our roots deeper in a market where we have quickly become established through M1. M1 already has 40,000 mobile subscribers.
The combination of C&Ws worldwide experience, Hong kong Telecoms regional experience and the local market knowledge of Keppel and SPH makes us a powerful contender, he added.
The Singaporean telecommunications authority said last year it would grant licences to a maximum of two operators, to compete with Singapore Telecommunications.
Two months ago a consortium including British Telecommunications and NTT, the largest Japanese operator, became the first to enter the bidding. Applications must be submitted by May 31. The bidding consortia must be owned at least 51 per cent by Singaporean companies.
The partners said on Tuesday that the shareholding structure of the new joint venture was still being finalised. The Keppel Group is involved in shipbuilding and repair, property, banking, telecommunications and engineering. SPH is a large publisher in the region with newspaper interests that include the English-language Straits Times.
The future of Hongkong Telecom has been a source of intense interest over the past few days following the sale of a minority stake held by Citic Pacific to China Everbright, the investment arm of the Chinese state council. There has been speculation that C&W might be forced to yield ownership of Hongkong Telecom to Chinese concerns.Mr Brown aims to exploit C&Ws spread of international assets. Its strength in Hong Kong and now in Singapore increases its attraction as a potential partner in a global consortium. Copyright Financial Times Limited 1997.