PCCW was formed by Li Tzar Kai, Richard, son of Hong Kong tycoon and billionaire Li Ka Shing. Formerly Pacific Century Development, it was an investment holdings company. The English name of PCCW was changed from "Pacific Century CyberWorks Limited" to "PCCW Limited" on August 9, 2002.
It then won a controversial land deal, acquiring valuable waterfront real estate from the government without any public auction bids. Many in Hong Kong cried cronyism, as Hong Kong chief executive Tung Chee Hwa gave away the land to his new high-tech residential and commercial venture called Cyberport.
The biggest blockbuster deal, though, was the year 2000 acquisition of Hong Kong Telecom in August of 2000, which was formerly known as the Hong Kong Telephone Company (founded in 1925). Initially, HKT owner Cable & Wireless entertained a bid from Singapore Telecom, but there was local concern of a Singapore company owning the largest Hong Kong telephone system. PCCW entered the scene and offered Cable and Wireless PCCW stock and US$11 billion in bank loans.
The acquisition vaulted PCCW from a small 1990s dot-com holdings company to the one of the largest corporations in Hong Kong. PCCW is now also the leading Internet service provider in Hong Kong, using the Netvigator brand for dialup modem and DSL service.
PCCW has been the object of much scorn in Hong Kong, since many residents are PCCW stockholders, as a result of the HKT purchase. In 2003 the company's stock price was down 96 percent from its 2000 peak.
In the face of challenges from debt, intense local telecoms competition and a struggling international joint venture Reach, the share of PCCW has been the worst-performing blue chip in 2002 and 2003.
In 2003, Cable and Wireless finished cashing in all the stock from the 14.7 percent stake it had in PCCW. Worth US$5 billion at the time of the 2000 acquisition of HKT, the stock sales yielded only $1.9 billion in the end.
Richard Li, gave up his spot as PCCW's chief executive officer in July 2003 but remain as chairman and executive director. Jack So, who left his chairman position at Hong Kong subway operator MTR Corp Ltd, took up the job of group managing director at PCCW on 25 July 2003.
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2 Establishment of Cascade 3 Education 4 Community service 5 Main business 6 External Link |
C&W event
New report from the Sunday Times on 6 February 2003 revealed that PCCW made a preliminary takeover approach to Cable & Wireless on December 2002 as the Bristish company's share languished near record lows.
Li told the Sunday Times newspaper that PCCW would not launch a hostile bid for C&W but that the two companies could work together to enhance shareholder value.
The Times quoted Li as saying that he was planning to try again this week with a two billion pound (US$3.27 billion) bid for C&W.
Following the news report, PCCW issued a statement through the Hong Kong stock exchange on 6 February 2003 morning saying it had not made a formal offer for C&W and was not in takeover talks with the company.
Later in the day in London and Hong Kong PCCW issued statements saying it had made a preliminary takeover approach to C&W in a letter at the end of 2002.
PCCW apologised on 10 February 2003 for making what were seen by some in the market as contradictory statements.The Hong Kong stock exchange demanded an explanation from PCCW after noting discrepancies between two statements regarding its approach to C&W about a possible bid.
However, C&W rebuffed the approach it made in a letter on December 31, 2002.
Establishment of Cascade
PCCW announced the formation of wholly-owned subsidiary Cascade at January 2003 and transferred almost a quarter of its total work force to Cascade. Cascade employs more than 3,000 staff as of June 2003.
Cascade provides PCCW's telecommunications network operations with support and maintenance services. It provides also network infrastructure design, build-out and maintenance services, consulting solutions, customer installation and maintenance services, project management, operating systems development and maintenance and technical support to clients other than PCCW.
The foundation also supports the Workplace English Campaign and other education-related initiatives, such as annual scholarships for top students nominated by local universities.
Education
PCCW foundation has provided sponsorship for local data network service for the Internet2 project initated by the Joint Universities Computer Center (JUCC). The project enables staff and students at local universities to connect and exchange with Internet2 universities all over the world in researching the next generation of networking technologies.Community service
PCCW provides communications services for a variety of social service schemes.
This includes support for students, single parents, the unemployed, distressed people and the elderly who benefit from counselling hotlines, info-line services for Medilink and networks to help find employment.Main business
See also: List of Chinese companies