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Virgin in talks to secure partner for mobile-Internet services

Friday, February 18, 2000


Britain's Virgin Group is looking to form a strategic alliance in Hong Kong's telecommunications sector to help it penetrate the potentially lucrative mobile-Internet market.

Andrew Craissati, chairman and chief executive of Virgin's Asian investment arm Virgin Management (Asia), said the subsidiary had entered into talks with four telecoms operators.

Mr Craissati dismissed rumours the company was interested in acquiring Cable & Wireless HKT's mobile-telephone business but did not rule out using HKT's mobile-telephone network to transmit content and services.

"We don't want to own a network," Mr Craissati said.

"We want to work in tandem with another partner, possibly more than one. And we won't acquire someone else's business unless it's good for the Virgin brand."

Virgin Management hopes to introduce to this region a package of mobile-Internet services including e-mail, news, radio and on-line shopping capabilities through Virgin-brand handsets.

"Internet and telephony will be our driving interest in Asia," Mr Craissati said.

"The boundaries between mobile telephony and the Internet will become greyer and greyer.

"We want to get in at the point where they converge."

Mr Craissati estimated that Virgin Mobile, a mobile-telephone company launched in November in Britain, had grown to a value of £2 billion (about HK$24.93 billion).

Despite its talks with local companies, Virgin Management was still in a "mind-searching process" about whether to commit to Hong Kong, Mr Craissati said.

"The question is, can we make a difference here? Will we be able to draw enough consumers? The market is cluttered."

Moreover, any alliance in Hong Kong would need to take into consideration business developments in other parts of the region, Mr Craissati said.

"We have to look at other markets at the same time," he said. "For instance, what does this transaction mean to Singapore?"

Mr Craissati said Virgin Management, which had ample funds for expansion, might also introduce the parent company's retail business and cinema chain to Hong Kong and the mainland.

The introduction of these businesses in the mainland would help establish the Virgin brand there, he said.

This would pave the way for other business ventures in the mainland, he said.

Virgin Management was also in negotiations with major players in Japan's Internet and telecoms sectors,

Mr Craissati said without elaborating.
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