CSL New World Mobility, majority controlled by telecommunications giant Telstra of Australia, may face cost-cutting measures when a Telstra executive takes charge of the Hong Kong operations next month, sources said yesterday.
Telstra deputy chief financial officer Tarek Robbiati will replace Hubert Ng Ching-wah as chief executive of CSL, Hong Kong's largest mobile operator, according to a CSL internal announcement.
Mr Ng resigned earlier this year and will leave the company next month after almost seven years.
His decision was mainly due to Telstra's new operating direction regarding CSL after Solomon Trujillo took over as Telstra chief executive in July 2005, market sources said.
'The new management, which has more a US style, was setting a high target for CSL to capture market share in Hong Kong in a more aggressive way,' the source said.
Existing management are under pressure to boost the subscriber base in what is already a saturated market.
Telstra merged its Hong Kong CSL mobile operation with New World Mobility, a mobile business of New World Developments in April last year to create CSL New World Mobility. Telstra owns 76.4 per cent of the joint venture and New World the rest.
CSL recorded HK$333 million profit before tax and interest for the six months to December last year as revenue jumped 41 per cent to HK$3.09 billion.
'There should be a lot of room to further cut costs, even after the integration with New World Mobility,' the source said, adding that CSL in Hong Kong had about 1,600 staff.
New World Mobility cut about 30 per cent of its staff, or about 100 jobs, before merging with CSL.
The joint venture, which offers mobile services through three brands - 1010, One2Free and New World Mobility - may seek an initial public offering next year if sentiment warrants.
Mr Robbiati has no experience of the Hong Kong mobile market.
He joined Telstra in November 2005 from Atradius, the world's second-largest credit insurer, where he was director of strategic marketing and head of bonding.