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PCCW Announces New Internet Services Strategy
PCCW, the Hong Kong-listed flagship of the Pacific Century Group and one of Asia's leading integrated communications firms, Wednesday announced new plans and overall strategy for its Internet services business unit.
While Internet services represent a small part of the overall enterprise value of the company, it foresees that this business unit will play a strategic role in contributing to high margin broadband subscriber growth in Hong Kong, Richard Li, PCCW's chairman and chief executive, told a press conference.
At the same time, the company expects to reduce costs through consolidation of related business activities, Li added.
Confirming its commitment to capping investment in Internet services, the company said that the actual investment in 2001 is expected to be 190 million U.S. dollars, less than 200 million dollars committed previously.
According Li, the new investment in the Internet sector in next two years from 2003 on will be capped to a maximum of 100 million dollars.
"The Internet services strategy supports our core business objective to maintain margins and grow the company's profit," Li said. "Our Internet services strategy is designed to provide a value-added service for broadband, which is a key source of growth for the company."
The new strategy allows options for participation in regional broadband deployment only after the success of these initiatives in Hong Kong has been proven, Li said. Beyond Hong Kong, the company's strategy will be designed to use scale and traditional advertising revenues to amortize content costs, according to Li.
Moody's Investors Service and Standard & Poor's Wednesday announced that they have assigned senior unsecured issuer ratings of Baa1 and BBB respectively to PCCW-HKT Telephone Limited, an indirectly wholly-owned subsidiary of PCCW.
PCCW believed that the investment grade ratings with stable outlook reflect PCCW-HKT Telephone's leading competitive position in Hong Kong's telecommunications market and confirm its strong financial condition.
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