Hong Kong Island: From a small stall to a global supplier

Loan matters require verifying assets and negotiating step by step, and the results won't be available quickly. Moreover, it's necessary to visit each company one by one. Of course, Wang Yaotang does need funds to fill the holes he created earlier, but there's no rush.

Having been busy with Lü Zhihe's matter for so long, Wang Yaotang originally thought he could finally relax, but when Awei brought up the switchboard issue, he could only lament that he was destined to be a busybody.

However, having promised to help from the north, he was indeed going to take it seriously.

He didn't know much about the telecommunications situation, only that Hong Kong Telephone Company was currently the only integrated telecommunications service provider in Hong Kong, and its largest shareholders were British Eastern Telegraph Company, Jardine Matheson, and four other British-owned companies, including Jardine Matheson and Hutchison Whampoa.

To get things done here, I first needed to understand the situation, so I made two phone calls.

After a moment, Wang Yaotang was somewhat taken aback. "What did you say? Hong Kong Telephone Company is gone?"

After hearing the explanation, he learned that while he was arguing with Lui Chi-wo and Li Xiangjiao, the British Eastern Telegraph Company had quietly sold Hong Kong Telephone Company to the Hong Kong government.

Name changed to: Hong Kong Telecom.

Wang Yaotang was momentarily stunned. Hong Kong Telephone Company was a truly monopolistic telecommunications company and integrated service provider. It was sold just like that?
In recent years, privatization waves have swept across many parts of the world. Now, the Hong Kong government is doing the opposite, which makes Wang Yaotang suspect that there is something fishy going on.

Will the problems encountered by the Eastern Telegraph Office be encountered in the north as well?

Will I be affected if I get involved?

Of course, nationalization wasn't without its advantages. First, it significantly reduced the difficulty for Wang Yaotang to obtain detailed information. After all, it was public property, and he could exchange it for the interests of the dead... Why not?

After making some arrangements, around noon, Qi Haolin, a deputy general manager of Hong Kong Telecom, arrived at the Union Building. Wang Yaotang greeted him very politely at the office door.

The rumored ruthless and vengeful Little God of Wealth was quite flattering to be greeted at the office door, and Qi Haolin bowed slightly when shaking hands with him.

After entering the office, brewing tea, and exchanging a few pleasantries, Wang Yaotang inquired about the Hong Kong Telephone Company. Qi Haolin said with some melancholy, "The public utility business isn't easy either, especially in recent years. Inflation has been severe, but telephone fees have only increased by 50% in 10 years. For public utilities, even a slight price increase will cause complaints. Money isn't worth much anymore. Don't be fooled by the annual revenue of 10 billion; after covering costs, there's not much profit left."

“How could that be?” Wang Yaotang frowned. “It’s nothing more than labor, equipment maintenance, electricity, and the like. The cost should be very low.”

“That’s how everyone sees it,” Qi Haolin said with a wry smile, spreading his hands. “I’ll give you some data and you’ll understand. From 1970 to last year, the number of landline phones installed in Hong Kong surged from 500,000 to 1.5 million. That’s a million new installations! New switches, overhead lines, and new equipment rooms all cost money. During this time, telecommunications technology has also been upgrading. Let’s not even talk about the stepper era. After T&T acquired a controlling stake from Jardine Matheson, it upgraded to a crossbar system. Ten years ago, it upgraded to an analog system, and the loans haven’t even been paid off yet. Last year, Bell Labs in the US officially commercialized digital switches, and it looks like we’ll have to upgrade the technology again…”

"This doesn't even include line improvements. It's impossible to run overhead lines in the main urban area. Laying underground cables would be very costly. Upgrading other equipment rooms and adding more equipment would also be too much for the Eastern Telegraph Company to handle."

Wang Yaotang smoothed his hair. This is just 2G/3G/4G/5G. The initial investment has just been completed, and in a few years, the technology will be upgraded, requiring further investment. If there are several upgrades in a row, it's impossible to play this game without substantial capital.

Seeing that Wang Yaotang understood, Qi Haolin thought for a moment and added, "Of course, this is also related to the current situation in Hong Kong. In bilateral negotiations, the head office believes that Hong Kong's future is uncertain and does not want to continue investing. The telecommunications industry is quite sensitive. If the North regains sovereignty, the head office believes that they will absolutely not allow the telecommunications industry to be privately controlled."

"This is not without precedent. The University of Tokyo was originally controlled by several families, including the Pengde family and the Rothschild family. Its core business was the operation of international submarine cables and telegraph services. It was deeply tied to the British colonial system. During World War II, the University of Tokyo's business was taken over by London. In 1945, Britain passed the Telecommunications Act of 45, which forcibly nationalized domestic fixed-line telephone and telegraph services and established the British General Post Office."

"Moreover, it's in the north. The head office was afraid of wasting its investment, so it had no choice but to let the government take over. Although this went against the economic liberalization that T.I. advocated in Britain in the 80s, there was no other way. Dongda had to withdraw, and the Hong Kong government had to take over."

Wang Yaotang frowned and thought for a moment. He remembered that Li Xiangjiao had ventured into Hong Kong's telecommunications industry in his later life, with a market value of tens of billions of Hong Kong dollars. Was it possible for him to get a share of the pie?

How much did Dongda sell for?

“HK$3.92 million, plus HK$2.5 million in liabilities, for a total value of HK$6.42 million.”

“It’s not as good as Shek O or Lamma Island?” Wang Yaotang was quite surprised.

Qi Haolin said somewhat cautiously, "Uh... Mr. Wang, that's not how you calculate it. Putting aside the situation after the negotiations, the technology needs to be upgraded again. The Bell 5ESS digital switch technology is indeed excellent. The standard version supports 1 subscriber lines + 2000 trunk lines (local/long-distance) and costs about $1800 million. The enhanced version supports 1.5 subscriber lines + 3000 trunk lines (including international long-distance interfaces) and costs about $2200 million. The full-featured version is customized for large operators, including intelligent network functions and network management systems, and costs over $2500 million."

"Upgrading just 50 telephones in the main urban area to the standard version would require an investment of nearly $10 billion!"

"This doesn't even include the circuit modification."

As if a bucket of ice water had been poured over his head, Wang Yaotang instantly sobered up.

What kind of telecommunications company? I don't care, I don't care at all.

This is something that only a damn country can afford to invest in; no normal company should even dream of it.

Of course, high investment also means high returns. 5ESS technology will dominate for at least the next 20 years. One investment, 20 years of benefits. If it raises funds through an IPO, it will definitely make a lot of money.

"Tell me about the changes that occurred after the Hong Kong British government acquired the property," Wang Yaotang changed the subject.

“Changes…” Qi Haolin blinked. “To be honest, there aren’t many changes. It’s just that the government will fund technology upgrades and line renovations in the future. Other than that… oh, I just remembered one, Haojiang!”

"What does this have to do with Macau?" Wang Yaotang asked curiously.

Qi Haolin said with a smile, "Macau was also a colony. Previously, the telephone and telegraph services in Macau were handled by Hong Kong Telephone Company. However, it has now been acquired by the Hong Kong British government, so the business in Macau has to be separated. After all, it is not a country. However, Macau does not have its own telephone company yet. The Portuguese Macau government is currently discussing whether the government should fund and manage it or sell it to a private company."

"However, the city of Haojiang is very small. The main urban area is not even as big as Wan Chai. There are only 8 telephone lines installed in total. The market is small. In addition, the urban area does not have as many high-rise buildings as Wan Chai. The cost of upgrading is low. Well, actually, it doesn't matter whether it is upgraded or not. The number of lines installed is not large. The Siemens EWSD analog switch currently in use is perfectly adequate."

Qi Haolin, a Hong Konger, habitually mocked 'Xiang Wuning,' saying, 'They don't even have an airport, what's the point of digital technology?'

"Huh!" Wang Yaotang suddenly became interested. Being able to get involved in telecommunications licenses without the pressure of upgrading, requiring little investment, and having high strategic value, this was perfect for him!
Others may not know, but I certainly do. Motorola's big mobile phone is about to sweep the globe. In the ensuing mobile phone craze, not only will the telecommunications companies make a fortune, but communications also have strategic value!

"How much do you think it would cost to acquire the telephone and telegraph business in Macau?" Wang Yaotang suddenly asked.

"Huh?" Qi Haolin looked at Wang Yaotang in surprise, scratched his face, and after a long while said, "The price offered by the Hong Kong government for taking over Hong Kong Telecom was too low. With an annual turnover of 10 billion, it's absolutely unacceptable to take 100% of the shares for only 6.42 million. The Macau branch may be small, but it doesn't have an urgent pressure to upgrade. The telephone business itself is profitable, and given that we can observe the market for a while, the price should return to market value. 8000 million, I think, is a reasonable figure." "Who currently controls this part of the business?"

"The company is currently in talks with the Portuguese and Macao governments through its Asia-Pacific branch."

Wang Yaotang nodded and didn't ask any more questions. He asked Qi Haolin for technical information on analog and digital 10,000-line switches and his experience using them, and then personally saw him to the door.

Such inside information is impossible to obtain without the necessary status and position, but for those with sufficient status and position, it's just a matter of making a phone call.

In the afternoon, Qi Haolin sent over another set of internal documents on the operation of the telephone and telegraph business in Haojiang. After reviewing them, Wang Yaotang ordered a boat to head straight to Haojiang.

Standing downstairs at the Lisboa Hotel, not seeing the figure of Gambling King Ho to greet him, Wang Yaotang shook his head and sighed to Ah Wei, "Sigh, our friendship has faded. Even Gambling King doesn't come to greet me anymore."

"Sir, would you like a red carpet laid out for you, and flowers to clear the way?"

A pleasant voice came from the side. Wang Yaotang turned his head and saw that it was He Chaoqiong. "Of course, it would be even better if it were available. It shows that the Lisboa Hotel values ​​its guests. Of course, we are all on the same side, so I won't complain."

"Ha, I only see you winning money at the hotel, I don't see you playing a few rounds here."

"What's the point of playing alone? You need someone to play with."

"Then I'll stay with you, okay?"

"I am deeply honored."

"You are so beautiful."

After exchanging a few jokes, the two went upstairs together.

"What brings you here to see my father this time?" Ho Chiu-king asked curiously in the elevator.

"Wait, I remember you said you were studying at university in the United States, and now you're already involved in family affairs?"

"No, it's a holiday. I'm studying marketing, and I'm doing an internship at home. It just so happens that I'm here today."

"Tsk tsk, I've always thought that subjects like marketing and business management aren't for ordinary people. What's the use of studying them if you don't have a company to manage for you at home?"

He Chaoqiong looked at Wang Yaotang with a strange expression.

Upon reaching the upper floor, Wang Yaotang saw He Duwang standing at the office door. He quickly walked up to him and said, "Uncle He, good evening. It's been a long time since I've visited you. How have you been lately?"

He Duwang's outstretched hand froze in mid-air, his smile turning into a wary expression. He glanced at his daughter beside him, then looked at Wang Yaotang with a warning in his eyes, "Wasn't that a bit too affectionate?"

“We have a relationship, after all. I’ve made 5 million through the Lisboa Casino twice, and I’m always grateful to you, Uncle He.”

"Come inside and let's talk." He Duwang's lips twitched. He didn't want to argue with Wang Yaotang about this. This guy was never one to respect his elders. He hadn't forgotten the time he slammed the blood-stained spear on the table.

Wang Yaotang chuckled and followed him inside.

Ho Chiu-king brewed some tea, and Wang Yaotang thanked him softly, took a sip, and chatted with Ho Chiu-king about the recent market in Macau. Affected by the financial crisis, the gambling industry in Macau has also been declining.

After chatting about various topics from Macau to Hong Kong, Wang Yaotang finally got down to business. "The Hong Kong British government took over Hong Kong Telephone Company, and Macau's telephone and telegraph business was separated. I'm thinking of setting up Macau Telecom to take over the business. Uncle He, are you interested?"

"Telephone business..." Ho, the gambling king, frowned. In addition to casinos, he also invested in real estate, building materials, docks, hotels and so on. Even if he didn't build a new casino, the money he earned from the casinos every year still needed to go somewhere, so he invested a lot, but his energy was not spread out to them.

“Yes, telephone betting has been available in the US for a while now, but I don’t think it’s available at the Lisboa Casino,” Wang Yaotang said.

"The Gaming Monopoly Contract, revised in 77, only allows on-site betting in Macau's gaming industry; remote betting is considered an 'illegal gambling intermediary' activity," said Ho, the gambling king, in a deep voice.

"What does the junket operator have to do with casinos? Things like horse racing, greyhound racing, and car racing. People on Hong Kong Island might want to buy a few tickets, but do they have to take a ferry all the way here? Hong Kong Telephone Company used to control the telephone business in Macau, which was quite risky. Why would they be afraid of being investigated if they did it themselves?"

He Duwang frowned at Wang Yaotang, thinking, "I'm afraid you'll stab me in the back."

Why do you want to invest in a telephone business?

"Ha, Uncle He, are you suspecting I'm getting involved in online gambling?" Wang Yaotang immediately understood the implication. "Relax, I'm eyeing the future of the telephone business. Satellite phones have already been commercially available this year, and as far as I know, Motorola is also preparing to launch mobile phones. I'm looking at the future. I'll get a telephone business license first, and use Macau as a springboard to make a comeback to Hong Kong Island."

“Satellite phone, mobile phone.” He Duwang muttered a few words and then paid no more attention. It was too far away. New technologies emerged every month, and he couldn’t keep up with them all.

However, it's enough that Wang Yaotang won't get involved in gambling. As for the reason for bringing him on board, Wang Yaotang's businesses are only in nightclubs and security, but he is different. He has a presence in all walks of life in Macau. He is willing to contribute, and everything will fall into place naturally.

"Okay, how much should I invest?"

"Let's start with 100 million, I'll give up 20%." As he spoke, Wang Yaotang glanced at He Chaoqiong.

“Daddy, leave this to me. Let’s put what we’ve learned to good use,” He Chaoqiong immediately added.

King He Du...

Suddenly I just don't want to invest anymore! (End of Chapter)