Hutchison Whampoa and New World Development are believed to be close to finalising separate arrangements with investors for their telecommunications arms. Hutchison Telecom's impending agreement, in which it would sell part of its mobile-telephone business to NTT DoCoMo, would help the Japanese cellular operator enter the mainland, analysts said. New World Development said the company was in talks with various potential buyers for its fixed-line telecommunication business and the transaction was expected to be finalised by the end of this year. It is believed Hutchison will finalise an agreement this week in which NTT DoCoMo will purchase a 30 per cent stake from the two existing shareholders in the SAR mobile-phone network. Hutchison owns 70 per cent of the network, while US-based Motorola owns 30 per cent. Hutchison spokesman Laura Cheung would not comment. NTT DoCoMo's parent company, Nippon Telegraph & Telephone (NTT), is the world's biggest telecom company and has budgeted 150 billion yen (about HK$11.43 billion) for overseas investments. It is looking to expand in Asia and plans to eventually become a global player. Hutchison's mobile network, valued by analysts at between US$3.9 billion and US$5 billion, has the SAR's biggest subscriber base of about 1.3 million people. Hutchison sold Britain's cellular network Orange to Mannesmann in October, leading Nomura Securities analyst Richard Ferguson to believe Hutchison chairman Li Ka-shing has realised the wireless businesses has 'reached the top of the cycle' and is capable of fetching 'fantastic value' if sold to larger carriers wanting to build worldwide mobile networks. Analysts said NTT was likely looking to expand to the mainland, where it could develop wideband CDMA (code division multiple access) mobile networks through a partnership with Hutchison. NTT and Hutchison could 'give China a third-generation [3G] wireless cellular strategy', Mr Ferguson said as NTT had the most advanced cellular network in the world and provided the mainland with 3G technology expertise. The Sino-US World Trade Organisation agreement will allow foreign companies to hold 49 per cent stakes in mainland telecom companies, immediately after it enters the trade body. Hutchison owns a joint-venture mainland CDMA mobile network with Great Wall Technologies. However, taking stakes in the Great Wall network may prove 'problematic', said Peter Lovelock of Maverick Research, as its assets were to be transferred to China Unicom. Unicom is presently trying to buy out foreign partners who had 'improperly' invested in its mobile networks since 1994. Meanwhile, New World plans to sell its fixed-line telecom network business to a consortium of investment funds for about HK$1.8 billion. New World declined to confirm if the JP Morgan consortium was one of the potential buyers but said negotiation was under way. GK Goh Securities analyst Roger Luk said New World had lost between HK$700 million and HK$800 million annually in telecom business in the past few years. The sale would help the company cut losses and substantially improve its earnings, he said. He expected the company would use the sale proceeds to pay land premiums for projects. TELECOMS
