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Denise Tsang

Power utility CLP Holdings has fired its first shot in the competitive telecommunications industry by launching Internet dial-up services.

The launch, through its telecoms arm CLP Telecommunications (CLP TeleCom), marked its diversification from core electricity supply into a multi-utility.

CLP spent about HK$100 million setting up the telecoms arm last year and aims to leverage the new business with its existing power infrastructure and 1.9 million customers.

CLP TeleCom managing director Peter Heavyside said: 'We want to be an IP-based application and network provider in the Greater China region.'

In Hong Kong, the company has rolled out 56K Internet dial-up services branded Oxygen, targeted at family clients.

Charging a monthly fee of HK$98 (excluding the Government's PNETS fee) for unlimited access to the Internet, the services include features such as free e-mail accounts, an online photo-album system and a family-member calendar.

The monthly fee will be a primary revenue source.

CLP TeleCom said it spent HK$50 million developing Oxygen. Since its trial run in February, it had secured about 1,000 customers, Mr Heavyside said. He would not say how many clients the company hoped to achieve in its first year.

'We aim to achieve a single-digit percentage of market share this year.'

CLP TeleCom planned to offer broadband Internet services in the middle of this year and applications on mobile phones later.

At present, there are about two million customers using dial-up services and about 400,000 broadband users. But broadband demand is expected to outpace dial-up services by a wide margin.

Asked about the company coming into the market much later than other utilities such as Hong Kong & China Gas (Towngas), Mr Heavyside said the Oxygen services were the first of their kind available in the market.

Towngas associate iCare.com offers Internet access on televisions and e-commerce services.

An analyst at a US brokerage said: 'Both CLP and Towngas trumpet their expansion into telecommunications and Internet by leveraging existing infrastructure and customer base. However, iCare seems not to be doing very well as its actual number of customers is falling short of target by far. The telecoms market is too competitive. I think CLP's road to success will be rough.'

Oxygen secured technology support from Hong Kong's PSINet, whose United States-based parent was on the verge of insolvency.

Mr Heavyside would not comment on CLP's reported takeover of PSINet, saying: 'It's news to me.'

He said government approval for the group to use regulated assets for non-power purposes - telecommunications -  was expected soon.

CLP plans to use its power cables between Sha Tin and Lowu for Internet services.

Fibre optic cables have already been wrapped around the power lines.

Mr Heavyside said CLP TeleCom had worked out cost-sharing with the group's power supply arm, CLP Power.



Launch of Internet dial-up services marks beginning of power company's diversification into multi-utility