Richard Li Tzar-kai

Hong Kong telecommunications firm PCCW eyeing ambitious global expansion

PUBLISHED : Wednesday, 18 March, 2015, 12:15pm
UPDATED : Thursday, 19 March, 2015, 11:39am

PCCW, the flagship conglomerate of billionaire Richard Li Tzar-kai, is sharpening its global ambitions with plans to pursue strategic investments and acquisitions that will build up its businesses across the United States and Europe.

“Our aspirations do not stop in Hong Kong,” the group’s managing director Bangalore Gangaiah Srinivas said yesterday.

PCCW controls HKT, which operates the biggest mobile and fixed-line telecommunication networks in Hong Kong, and runs Now TV, the city’s largest pay-television provider.

The company’s PCCW Solutions subsidiary is also the city’s leading supplier of information technology services.

Srinivas said PCCW was gearing up to further expand its information-technology services business in mainland China, while “looking at investments in companies with significant presence in the US, Europe or both” to broaden its corporate- and consumer-focused operations.

He said the company preferred to take a majority shareholding in new corporate investments, but was also open to partnership deals.

Anand Ramachandran, Barclays’ head of telecommunications, internet and media equity research for Asia, excluding Japan, said in a report that PCCW’s initiatives for its media operations would include “expanding content creation, global partnerships and [more] over-the-top (OTT) platform reach and use.

OTT refers to a range of online or “value-added” services that people are able to use for free or via subscription over the network of a telecommunications network services provider to which they use.

Earlier this month, PCCW announced its purchase for an undisclosed amount of a controlling interest in California-based OTT content services provider Vuclip to bolster its international media business.

Vuclip runs a mobile video-on-demand service that currently operates in India, Indonesia, Malaysia, Thailand, Egypt and the United Arab Emirates, with plans to roll out in other Southeast Asian countries this year.

Its subscribers receive on their smartphones and other internet-connected mobile devices a vast catalogue of more than 1 million titles, including Hollywood and Bollywood movies.

Any investment that we make goes through an extensive debate in the [company’s] board. If you have global ambitions, you have to make big bets
Bangalore Gangaiah Srinivas, PCCW managing director

In October last year, PCCW acquired for an undisclosed sum European security company Crypteia Networks. This Athens-based firm provides online security technology that helps companies monitor and identify network threats, an expertise that fit PCCW’s information-technology services business.

Srinivas, however, declined to comment on recent reports that PCCW was in talks to buy a 49 per cent stake in Dailymotion, which is owned by French telecommunications operator Orange.

Reports described PCCW’s offer would value Dailymotion, which operates a European video-sharing service that rivals YouTube, at about 250 million euros (HK$2.05 billion).

“Any investment that we make goes through an extensive debate in the [company’s] board,” Srinivas said. “If you have global ambitions, you have to make big bets.”

Srinivas has an extensive experience to back up his confidence about PCCW’s expansion plans. Before joining the group in July last year, he served as president of Infosys, India’s third-biggest information-technology services provider by revenue and one of the country’s largest publicly traded companies.

“Mr Srinivas comes with a distinguished track record in the global IT sector and thus, should be well-placed to continue to drive the growth in PCCW’s IT business,” Ramachandran said in a report.

PCCW last month reported a 24 per cent year-on-year increase in revenue to HK$32.96 billion last year from its core telecommunications, media and information-technology services businesses. Media contributed HK$3.2 billion, while technology services added HK$3.4 billion.

The company completed in May last year its US$2.43 billion takeover of CSL New World Mobility to once again become the city’s biggest telecommunications network operator.