Communications Authority move on Richard Li telecoms purchase likely to delay approval

The Communications Authority has ramped up its review of a HK$19 billion telecoms takeover deal by Richard Li Tzar-kai in a move that will delay completion of the planned acquisition of CSL New World Mobility by his PCCW-controlled HKT unit.

A government source told the South China Morning Post that a consultant had been hired by the regulator, which has the power to block the deal on competition grounds, to investigate concerns that the transaction would give Li too much power in the city's HK$63 billion telecommunications market.

Due to the complexity of the deal and the time needed to assess comments from the consultant, it is likely that the government review will take more than three months, the source said. HKT had hoped to complete the deal by March.

The Communications Authority is also expecting comments from other telecom operators during a one-month public consultation that began last week.

The combined market share of HKT and CSL - which own the brands PCCW-HKT, 1010 and One2Free - in the local mobile market would be 31 per cent in terms of subscribers and 38.3 per cent of spectrum, the broadcasting frequencies over which mobile phone services are provided.

"In the local guidelines or laws, it isn't stated how big a percentage [of market share] would be deemed acceptable," the source said.

When contacted by the Post, a PCCW official said the company had no comment beyond that made at a news conference last month to announce the deal.