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Cable and Wireless plc (CWP) Message Board

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  • zzxxxx zzxxxx Nov 6, 1998 3:18 PM Flag

    Throwaway buiness???

    MCI had a number of business adventures which did
    not
    workout. Mexico, Local services, Rupert Murdock. But,
    their
    internet service was successful and growing
    rapidly.

    CWP got a bargain price for a rapidly growing
    business.
    This should help lessen the percent of earning form
    HKT.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • >>The Wall Street Journal Interactive
      Edition -- November 6, 1998
      Business and Finance -
      Asia

      Hongkong Telecom Posts Modest Rise,
      Citing
      Effects of Slowdown, Competition

      Dow Jones
      Newswires

      HONG KONG -- Emphasizing that it is still in a
      transition phase, Hong Kong Telecommunications Ltd. Friday
      reported a
      modest 1.4% rise in interim net profit to
      6.1 billion Hong Kong dollars (US$788 million) for
      the six months ended Sept. 30,
      a far cry from the
      double-digit growth of previous years.

      But the former
      telecommunications monopoly said the result reflects a faltering
      domestic economy, the Asian crisis and keener

      competition hitting a company which is reinventing itself.
      "We expect the effects of the economic slowdown on
      our core
      businesses to endure for the remainder
      of this financial year at least," said Chief
      Executive Linus Cheung. "In addition, we
      anticipate
      that competition will intensify as Hong Kong becomes
      one of the most liberal communications markets in
      the
      world."

      The effects of competition were
      reflected in a 16% drop in revenue from international
      direct-dialing, or IDD, charges, which
      contributed HK$7.48
      billion. These charges represent 44% of overall revenue,
      down from 51% a year ago and 63% five
      years ago,
      and the company emphasized that part of its strategy
      is to wean itself from its one-time IDD cash cow.
      Revenue
      from non-IDD services now represents 56% of the
      total, up from 49% a year before.

      Under an
      agreement with the government, the IDD market will be
      thrown open from Jan. 1, although the telecom
      provider
      already faces competition in IDD calls, including
      from discount operators outside Hong Kong.


      Chairman Richard Brown, also chief executive of Hongkong
      Telecom's majority owner Cable & Wireless PLC, said Cable
      &
      Wireless fully backs any moves by Hongkong
      Telecom outside its home market. But executives didn't
      give details of where
      the company, which has about
      HK$15 billion in spare cash, would like to invest
      next.

      The company said it had 830,000 mobile-phone
      subscribers at Sept. 30, adding that revenue in this market
      grew by more than
      28%. In the previous period it
      reported 515,000 subscribers and 60% growth year on
      year.

      It reported that the subscriber base for its
      Netvigator service grew by 30% over the previous year,
      claiming a clear lead in the
      territory's Internet
      market, but didn't provide a number. At the same time
      last year, Hongkong Telecom said it had 150,000

      Netvigator customers.<<

    • The CW in US is only a marginal piece of the pie.
      Yes they have a billion dollar revenue, not much
      profit, they are the token precence. The profits US part
      of CW hardly shows up on the annual report.
      The
      CWP investment is in its unloacked value that R.
      Brown is trying to shake loose. Having 50+ telephone
      companies around the world is not a small thing.

      For
      the CW-US the MCI deal was great for them because
      they can now get in the map, more visibility=more
      potential customers=more business. Hopefully they will
      execute well.

      Regarding the "garbage" comment, I
      appreciate the perspective. I do disagree thought,
      especially since it was based on a CWP performance
      comparison against MSFT. The truth is that everyone is
      garbage if you look it that way. CWP is a different kind
      of investment.

      If you know which is the next
      MSFT, CSCO, etc. for the next 5 years then put all you
      money there. It is that simple. I like CWP because of
      its lower risk, global presence, and recently R.
      Brown. Certainly not because of its US unit (small
      player) which will hopefully also grow to make us all
      money.

    • The CW in US is only a marginal piece of the pie.
      Yes they have a billion dollar revenue but not much
      profit. They have only a token precence there. The
      profits of the CWUS hardly show up on the annual
      report.

      The CWP investment value is in its unloacked value
      that R. Brown is trying to shake loose. Having 50+
      telephone companies around the world is not a small
      thing.

      For the CWUS the MCI deal was great for them. They
      can now show up in the radar, more visibility=more
      potential customers=more business. Hopefully they will
      execute well.

      Regarding the "garbage" comment, we
      should appreciate the perspective. I personally disagree
      thought, especially since it was based on a performance
      comparison of CWP against MSFT. Everyone is garbage if you
      look it that way. CWP is a different kind of
      investment.

      If you know the new MSFT, CSCO, etc. for the next 5
      years then put all you money there. It is that simple.
      I like CWP because of its lower risk, global
      presence, and recently R. Brown. Certainly not because of
      its US unit (small player) which will hopefully also
      grow to make us all money.

 

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