PCCW desperately in need of Telstra tie-up

For Pacific Century CyberWorks (PCCW) the music has stopped and investors’ love-in with the company has come to an end; the share price has dropped two-thirds since it announced its takeover of Cable & Wireless HKT. But it’s not just stockmarket investors who have ditched PCCW and its promised riches – previously announced deals are falling by the wayside as well. Planned joint-ventures with CMGI and GigaMedia are no longer on the cards and there is intense speculation that Telstra may complete the hat-trick – a move that would rob PCCW of a much-needed $3 billion of fresh capital.

For now, PCCW is keeping its numerous PR mouthpieces well away from the phones – not very good for business considering the company is Hong Kong’s number one telecoms provider. Telstra on the other hand maintains the two companies are still in talks and aiming to get a deal done by year-end. “Our intention is to get a deal done; it can only be good for both companies,” says Telstra spokesman Steve Wright.