HKBN to buy New World Telephone in $83 million deal

19 February 2016 | Jason McGee-Abe

Hong Kong fixed-line operator HKBN has entered into an $83.6 million deal to acquire New World Telephone Holdings Limited (NWTHL) to further penetrate the enterprise market.

The deal, subject to shareholder approval, will see HKBN acquire the telecommunication and online marketing business of NWTHL, which will include IDD services, data centre services, core fixed-line and broadband business.

HKBN says the transaction will give them the necessary scale to compete with incumbent players of the broader enterprise telecommunications market.

“This acquisition will double our scale in the enterprise solutions market, which represents approximately one third of the total revenues for the enlarged group,” said William Yeung, CEO of HKBN.

HKBN’s current enterprise customers are mostly SMEs but the deal will enable access to NWTHL’s customer base, primarily comprised of medium-sized businesses. Its reach is set to be boosted with the addition of around 200 commercial buildings to its network, creating additional route diversity for overlapping coverage.

The operator believes the acquisition will result in a business with more than HK$3 billion in total revenue and HK$1 billion in enterprise services revenue. In the year ending 30 June 2015, NWTHL’s fixed-line and broadband telecoms business generated HK$613 million, with 94% of revenue generated from commercial customers.

Over the past 14 years, HKBN has invested a total of approximately HK$4.1 billion in fixed assets establishing an extensive fibre optic network in Hong Kong. 

In its efforts to provide faster broadband access and better services, HKBN also announced this week that it had signed a memorandum of understanding (MoU) with to introduce a new OTT content service.

Last year, HKBN successfully raised $750 million in an IPO.