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Round 1: Hong Kong
SingTel's loss to PCCW short-circuits the Wired Island
By ERIC ELLIS
February 29, 2000
Web posted at 1 p.m. Hong Kong time, 12 a.m. EST
So it was young Richard Li who delivered the killer punch in the Great Asian Telco Battle. And yet again, Singapore Inc. is left crying at the altar. For the Asian Net, this $40 billion crapshoot has implications way beyond the fact that a century-old colonial relic, Cable & Wireless HKT, has passed to a year-old company, Pacific Century CyberWorks.
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It partly answers a question I get asked all the time. Which approach is best for Asian Net start-ups, Singapore's top-down or Hong Kong's just-wing-it? Official Singapore wants to become Asia's Net and e-commerce hub. Its bureaucrats have developed a sophisticated policy platform that involves spoon-feeding local start-ups.
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The self-styled Wired Island likes to think of itself as Asia's California, where start-ups sprout in converted shophouses and lofts. Of course, some are doing exactly this, but scratch the surface of your average Sing start-up and a large dollop of government cash is not so far away. Only yesterday, the British venture capital group 3i inked a deal with Singapore's science board and the government investment corporation to seed start-ups. Today, that same investment board is ruing that one of its prime investments is left sulking at missing out on HKT. And what has been SingTel's unsurprising response to the HKT imbroglio? Threaten to sue the advisers.
True, PCCW got its leg-up in Hong Kong with a cozy government deal, but that had the effect of concentrating the collective HK Net nerd's mind on start-ups. Wander the back streets of North Point and Kwun Tong now, where once sweatshops assembled Gap T-shirts, and there are start-ups doing it hard--without any government handouts. The energy is palpable. Some of that buzz is evident in Hong Kong's roaring tech sector, which was lagging behind Singapore's for the best part of last year. Not any more. It's a similar story in Taiwan and Korea.
Of course, PCCW is not your average start-up, not when the principal is the son of one of the world's richest men, and has a fair-sized bank account himself. But talk to Li and he expresses a disdain for bureaucracy and a belief in the garage-based economy that is the essence of Silicon Valley. Coming from Li, who has in a year created a company with a market cap that embarrasses Amazon.com, this seems more real than coming from a cardboard-cutout Singaporean bureaucrat who has a subscription to Wired magazine.
Silicon Valley start-ups absolutely abhor government involvement. That smacks of control and interference. If the region's grassroots has any political sensibilities at all it might be classified as libertarian anarchy. This is a place where Steve Jobs is God, and where the garage that he and Steve Wozniak started Apple Computer is now a museum.
The loss of HKT is an issue for Singapore that goes beyond Singapore Telecom. Another Singapore Inc. member, Singapore Airlines, continually sought--and was frustrated by--a number of suitors in Australia and South Africa before it inked a deal with Virgin's Richard Branson. And then there is Singapore's debacle in Suzhou.
So the answer to that question of Singapore vs. Hong Kong? Unquestionably Hong Kong. The new, bigger question is: can Singapore cut it in the big wide world?
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