PCCW, Legend Co-Brand Net-Enabled PCs in China

Pacific
Century CyberWorks Ltd
(PCCW) and China-based PC manufacturer Legend Holdings Ltd formed a
strategic alliance Thursday to develop co-branded Internet-enabled PCs.

The
units will be called Legend-NOW, and will assist in delivering broadband
interactive Internet service in China.

Legend is the largest PC manufacturer and distributor in China with a market
share of 27.3 percent in Q4 1999, according to industry research company
International Data Corp. Majority-owned by the Chinese Academy of Science,
Legend has 2,000 distributors across 33 provinces in China.

Terms of the agreement were not disclosed at press time.

Under the agreement, Legend will design and manufacture PCs with a built-in
cable modem allowing broadband connectivity to the Internet with one-touch
access to PCCW’s NOW portal – “Network of the World” – an interactive
digital video and Web access service.

According to company officials, the service will be launched in Asia in June
this year.

Richard Li, chairman and chief executive of Pacific Century Group, the
parent company of PCCW, said that 80 percent of the NOW content
originates from the UK.

Li added that the NOW staff will expand
from the current 300 to 700 within 45 days, and that Legend will be an exclusive partner for PCCW’s China
operations for both the NOW content and a broadband Internet service tailored
for Chinese users.

The existing narrowband service of Legend (based on Conet: a first-generation
Internet-enabled PC with one-touch connection to a Legend-operated portal)
will still be non-exclusive.

Legend will provide its narrowband service users a link to the NOW portal
with upgrade options to use the broadband service.

Industry analysts said that the recent merger between PCCW and Cable &

Wireless HKT Ltd (HKT) announced Tuesday will help PCCW to deliver its
broadband service in Asia through HKT’s fixed, wireless and satellite
network. HKT has 800,000 ADSL users and 1 million mobile phone users in Hong
Kong.

The Financial Times newspaper interviewed Rupert Murdoch after PCCW won the
HKT bid. Murdoch was reportedly concerned that the US$1 billion injection of
his News Corp company (in an unsuccessful attempt to assist SingTel’s rival bid for HKT)
might affect cooperation between Star TV and HKT on broadband interactive TV
projects.

Star TV was formerly owned by Pacific Century Group and was sold to News Corp in
1993.

In response to the report, Li said that the merger bid would not affect
future cooperation opportunities between HKT and News Corp. He added that
every business decision would be based on the interest of the shareholders.

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