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HK's Star Telecom dips toe in China Internet market

HONG KONG: Star Telecom International Holding Ltd has taken a first step into China's embryonic Internet market, agreeing to build a service system for a Chinese state-owned operator.

"We expect to sign a contract in three months' time," the chairman of the Hong Kong company, Nelson Wong, said in an interview on Wednesday.

He said Star and the operator, which he declined to name, had signed a memorandum of understanding last week.

The system will cost HK$4 million to HK$5 million (US$516,795 to US$645,995) to build.

"That's not a big contract. But it will mark our entry into the Internet sector in China," Wong said.

Among its 1.2 billion people, China now counts perhaps 60,000 cyberspace junkies.

"I think China is potentially a very big market for the Internet. One day, any Chinese without an E-mail address on his business card will be regarded as out of fashion," Wong said.

Foreigners have so far been prevented from acting as Internet service providers in China.

But in Hong Kong, Star Telecom has been a service provider for more than a year and claims to have the biggest market share -- more than 20,000 subscribers.

It hopes to increase its subscriber base to 50,000 by the end of 1996.

Hong Kong, with a population of six million, has about 100,000 Internet users. "Many of them are university and secondary school students," Wong said.

Star's Hong Kong Internet system can accommodate between 50,000 and 60,000 users. The firm regularly updates its hardware and sells outdated equipment to operators in less advanced countries, Wong said.

The company is keen to expand beyond Hong Kong and China.

"We are very optimistic about our Internet business. We are using Hong Kong as a base to develop into less developed countries," he said, noting that the firm was negotiating a technological consultancy deal for Internet service in an unidentified Asian country.

"In Hong Kong, we are also developing an interphone system, that is, using the Internet for long-distance calls," he said. "If everything goes well, it will be ready by the end of June."-Reuter