Hong Kong Internet company, Tom.com, announced this week that it plans to tie up with mainland telecoms group, China Netcom, to provide an Internet dial-up service, called Tomnet, for 17 mainland Chinese cities with no roaming or extra network charges.
In a press statement, Tom.com explained: 'China Netcom provides proven technology for the service, while Tom will leverage its large user base to exploit marketing and promotional opportunities.'
In terms of cash flow Tom.com is considered a fairly wealthy company in Hong Kong after a very successful IPO last year and there are no signs as yet of Tom.com going the same way as many Internet companies in Asia which appear to be fighting to keep their heads above water. Initially set up as a portal, the company has expanded by buying into several mainland Chinese media and advertising firms. The company is also well supported by Hong Kong's richest tycoon, Li Ka-shing, who is the company's major shareholder.
Jay Change, head of Internet research at Credit Suisse First Boston in Hong Kong, told the Financial Times: 'These guys have a lot of cash and they have Li Ka-shing as a primary shareholder still, so they're in it for the long haul. As this market develops they're probably going to try a lot of things to see what sticks.'
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