3G -> Finally, Hong Kong rationalizes 

Score one for 3G.

It’s 3G, and the aggressive competition between market leaders that has forced Hong Kong’s New World Mobility to the altar with CSL.

CSL’s parent Telstra this morning announced a memorandum of understanding with New World Development for a merger between the two operators.

Under the terms announced, CSL would hold 76.4% and New World Mobility 23.6%.

The combined group would become Hong Kong’s largest, with 2.6 million subs compared with Hutchison’s 1.92 million.

New World’s results tell the story. Its 2004-05 turnover was up fractionally to HK$1.7 billion, but services revenue actually fell 8.6%.

Over the years CEO Norman Wai has made a brave face to the media over the firm’s lack of a 3G license. He told this reporter two years back that he believed New World would be able to compete with EDGE.

3G is no longer easy to dismiss. It is the dominant force in the mobile market today. Wai admitted this in New World’s annual result last month, where he said 3G had created an “adverse situation” for New World.

With China Mobile sniffing around Peoples, the other operator missing a 3G license, it was time for Wai and his parent company to jump. The parties have set a December 2 deadline for agreement.

- Robert Clark