AT&T opts for Asian 'watch-and-wait' plan
US telecoms giant AT&T remains on a watch-and-wait strategy on new investments in Asia, regional managing director for business development Francis Lim says.
'Yes there are a lot of cheap assets to be had right now. But if you look at these companies the reasons why they are cheap is because previously they have been mismanaged,' he said.
'There are countless opportunities out there. However, it is not just a matter of writing the cheque, it is what you do with [the company] afterwards. You need to have the people to turn it around.' Many of the world's larger and wealthier operators have been scouting Asia looking for assets made considerably cheaper as a result of the regional currency crisis. However, few if any significant deals have been struck.
'We are all out there watching. It is the sort of situation where we are all watching who acts first. We all know who the targets are but no one has made any moves,' Mr Lim said.
One of the problems for AT&T was its size and established business culture, which meant it could not be as nimble as some operators in exploiting emerging and possibly risky opportunities.
'Being AT&T it is a lot tougher. It is difficult for us. If you have a US$50 billion income stream you think differently,' he said.
In terms of direct investment, AT&T was a founding shareholder of cellular operator SmarTone and now has a 16 per cent stake. It also runs an Internet service business.
Outside the SAR, it also has controlling stakes in two more Internet service companies - in Japan and Australia.
The company also has cellular investments in India and runs a small network at Subic Bay in the Philippines.
Its most recent cellular investment is a consortium to operate mobile services in Taiwan. The consortium - Far EasTone Telecommunications - has the island-wide PCS licence and the northern Taiwan GSM licence. AT&T holds an 18 per cent stake.
Mr Lim said the services, which started in January, were 'going like gangbusters'. The company plans to use dual-mode handsets from the beginning and has country-wide roaming.
Away from direct investments, AT&T's main focus is on global services for multinational companies (MNCs) through its World Partners alliance.
'AT&T's game plan is to service the MNCs - they are our biggest customers so we go where they go. Any place with a high concentration of MNCs and you will definitely find us there,' Mr Lim said.
In Hong Kong, AT&T has distributed its services through Hongkong Telecom. With full deregulation of the market on January 1 of 2000, AT&T may be able to establish its own switch and bring in its own traffic. Until then it must use Hongkong Telecom's gateway.
Mr Lim said no decisions had been made. 'Putting in a switch versus an agreement with a local player, that is always a tough one to answer and right now the answer is, 'I don't know'.' The Government has still to decide if more than another three international licences will be offered. This would restrict international gateways to Hongkong Telecom, New T&T, Hutchison Telecom and New World Telephone.
Mr Lim said the fact that the regulatory environment was still not clear made decision-making difficult.