Australian operator Telstra has not ruled out taking a stake in a local fixed telephone network services (FTNS) operator to gain entry to the market, said a company executive. 'We did due diligence on a number of them,' said Telstra greater China managing director Warwick Pye. 'We're reviewing our international strategy. We're just waiting and seeing.' Mr Pye refused to say whether Telstra had discussed taking a stake in New World Telephone following the Government's May announcement that it would extend the moratorium on FTNS licences until 2003. The Government also said it would grant New World, Hutchison Telecom and New T&T an external facilities licence that will let them operate their own international call gateway from January 1, when Cable and Wireless HKT will lose its monopoly on the SAR's international call gateway. By taking a stake in an FTNS carrier, Telstra would have access to the local phone services market and could also send calls overseas on its own network. Telstra did not apply to the Government for a wireless FTNS licence or an external facilities licence before last month's deadline, although it is interested in those markets. The operator initially intended to apply for an external facilities licence using its investment in the SEA-ME-WEA3 undersea cable to qualify. The Government has said it would consider granting licences to operators that invested in new undersea fibre optic cables linked to Hong Kong, but exempted SEA-ME-WEA3 because it did not have a landing point in the SAR. 'We're looking at what new cables are coming to (Hong Kong) over the next 12 to 24 months,' Mr Pye said. 'This is a very big priority.' Telstra has signed a memorandum of understanding to invest in the pan-Asia APCN2 cable, which will land in Hong Kong by 2001, Mr Pye said. 'That's still not a done deal, in our perspective.' Telstra, Australia's former monopoly operator, has branched out into electronic commerce and the Internet in its home market. Telstra could consider a stake in an Internet service provider (ISP) or e-commerce company in Hong Kong, where it plans to offer corporate customers bundled services such as business-to-business e-commerce and Net access. 'An ISP is a nice entry point,' said Mr Pye.