What made Netcom buy PCCW stake?

Chinese telco enters the Hong Kong market. Good luck will be the verdict of many.

The worst-kept secret in Asian MA was finally announced yesterday when China Netcom declared its intention to buy 20% of PCCW. In doing so it is dipping its toe in what many will regard as one of the world's most difficult telecoms markets - indeed, a market so difficult that the operators and the regulator OFTA frequently take pot shots at each other in the media.

Hong Kong's mobile phone market is highly fragmented and contains six operators whose ARPUs average revenue per user have been progressively declining thanks to price wars. The local fixed line and IDD business is under massive pressure from new technologies, primarily Vo...

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