KDD Corp. and Singapore Telecom reached an agreement to form a strategic partnership that includes a joint venture for corporate data communications services and the cross-holding of shares, top officials of the two major telecom carriers in Asia announced on Wednesday.

The two carriers will set up a joint venture to offer data communications services to multinational corporate users based on the common asynchronous transfer platform mode in April 2000, the executives said.

“After many years of working together, we have decided to take our mutual relationship a level higher by forging a strategic partnership,” said Lee Hsien Yang, president of SingTel, through a televised press conference from Singapore.

The two carriers will invest about 37 billion yen over a five-year period in the proposed joint venture on a 50-50 basis, combining both cash and facilities-based investment.

KDD President Tadashi Nishimoto said the firm hopes to make 50 billion yen in sales in four years after the firm starts operations.

The two carriers also agreed to s cross-holding arrangement in which the two firms would swap about 45.2 billion yen in shares each.

Under the agreement, KDD will issue 4,011,800 new shares, or 4.99 percent of its total shares to SingTel, while SingTel will issue 221,310,898 new shares, or 1.43 percent of its total shares, to KDD.

The deal would make SingTel the fourth-largest shareholder in KDD following a posts ministry cooperative association, Toyota Motor Corp. and Nippon Telegraph and Telephone Corp. After the deal is completed, KDD will become the fifth-largest shareholder of SingTel.

The top officials said that their strategic partnership is open to other telecom carriers in Asia, Europe and the United States, which are needed to form a network to cover the globe.

“The partnership (with SingTel) is a part of KDD’s international strategy to build seamless network covering Asia, Europe and the United States and provide the next-generation services. This partnership is our first step,” Nishimoto said.

The two companies have maintained a close relationship as members of World Partners, an international alliance of telecom carriers led by AT&T Corp. of the U.S., serving multinational corporations.

The World Partners alliance will be effectively dissolved by the end of the year as a result of AT&T’s move to link up with British Telecommunications PLC, prompting KDD to look for other overseas partners.

AT&T and British Telecom have also been forging closer ties with KDD’s rival, Japan Telecom Co., including equity acquisitions in August.

KDD is also reportedly in talks with Qwest Communications International Inc. of the U.S., hoping to secure a tieup agreement by the end of this year.

SingTel is the largest telecom carrier in Singapore that offers domestic and international telecom services as well as cellular phone services and postal services. Sales of the carrier was about 3.079 trillion yen in fiscal 1998.

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