PCCW To Bid For UK Broadband Licenses

by Mary Swire, Tax-News.com, Hong Kong

06 May 2003

Hong Kong telecommunications firm Pacific Century CyberWorks (PCCW), which bought Hong Kong Telephone from Cable and Wireless three years ago, and recently failed in a bid to buy C & W itself, is about to bid for 15 UK broadband wireless network licences being offered by Britain's Radiocommunications Agency. Bids will be made through specially incorporated UK subsidiaries.

PCCW chief communications officer Martin O'Connor told the South China Morning Post on Sunday that the company had applied to bid for the licences. "We are looking at this... at this stage we are evaluating the opportunity, but no decision has been made," Mr O'Connor said. "What we have done is we have put in the application for the auction but the bidding is not scheduled until the end of May."

The bidding is going to be a far cry though from the astronomical sums thrown away by telecommunications companies in 1999 and 2000 and which led directly to the downfall of the TMT sector. Three of the available metropolitan licences will carry a reserve price tag of GB£300,000, while the remaining four metropolitan and eight regional licences have a reserve price of GB£100,000 each.

Last year PCCW turned in a loss of US$995m after writedowns, including losses on its holdings of C & W stock. Net debt has been reduced but still stands at US$4.2 billion.

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