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Beijing/Hong Kong (pte028/25.02.2005/15:15) - China Network Communications http://www.chinanetcom.com.cn and PCCW http://www.pccw.com have formally agreed to pursue business ventures as part of their new 1 billion dollar alliance. As the Wall Street Journal (WSJ) http://www.wsj.com reports, Zhang Chunjiang, the China Network chairman, said that the two companies could collaborate in areas such as broadband television, mobile phone service and real estate. They could also combine parts of their international businesses. It is, however, unknown, when any new ventures will get off the ground. PCCW, which doesn't currently offer mobile phone services, will be China Network's "most selected partner, added Zhang.
According to Zhang, the state-controlled China Network, otherwise known as China Netcom, signed a memorandum of understanding with PCCW to set up a "strategic committee" and working groups to scout business opportunities. PCCW is Hong Kong's dominant landline phone operator. The plan follows the agreement last month for China Netcom, one of the two major providers of landlines in mainland China, to buy a 20 per cent stake in PCCW for roughly 1 billion dollars. "You can rest assured we're working on deals actively," said PCCW deputy chairman Jack So. "Business ventures will be initiated as soon as possible."
A presentation held yesterday touting the synergies of the deal stressed that the broadband-TV business, which PCCW now offers in Hong Kong, could help China Netcom develop on the mainland. According to the presentation document, China Netcom could have 40 million broadband users by 2008, about 15 per cent to 20 per cent of whom might sign up for TV delivered over the internet. China Netcom's revenue from broadband TV could top three billion yuan (around 276 million euros) by 2008, the presentation said. According to Zhang, he was confident would obtain a license from the Chinese government to offer mobile phone services. "The only thing we are uncertain about is the timing," he said.
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