CHINA-BACKED CITIC Pacific has decided against bidding for the second Hongkong telephone network, opting to use its partnership with Hongkong Telecommunications to break into China's potential telecommunications market.
CITIC Pacific chairman Larry Yung Chi-kin said yesterday the decision was made after a six-month feasibility study.
The finding suggests that it would not be financially viable for the group to run a second network after 1995 if it could maintain a substantial holding in Hongkong Telecom.
''Buying a 12 per cent stake [in Hongkong Telecom] at a discount price of $7.80 per share [from CITIC (HK)] is certainly a better deal for the group,'' Mr Yung said.
He believed the Hongkong Telecom investment would bring a higher return than CITIC running a network on its own.
Mr Yung said the group's initial interest in tendering for the second network was based on the assumption that only one licence would be granted to compete with Hongkong Telecom.
However, with the Government deciding to allow more competition, the rules of the game had changed, he added.