As part of the alliance, Telstra, Australia's dominant telecommunications company, will invest a total of $3 billion in cash in CyberWorks and a new joint venture between the two companies. Of the total, $1.5 billion will be paid to CyberWorks in return for notes convertible into CyberWorks shares, company chairman Richard Li told an analysts' briefing.

The remaining $1.5 billion will be injected into a new mobile telecommunications joint venture formed by the two companies.

CyberWorks will own 60 per cent of the new company, while Telstra will hold the remaining 40 per cent, Li said. ``We also intend to have an IPO (for the new company) as soon as possible,'' Li added. Apart from the $1.5 billion cash injection, Telstra will also inject $1 billion worth of its mobile access - including its 1 million cellular subscribers - into the new venture.

Li of CyberWorks said the venture will be the first vehicle through which it will deliver content from its soon-to-be-rolled out broadband network.

``This will be the first step to unlock value from'' the newly merged entity between Pacific Century CyberWorks and Cable & Wireless HKT, said Li.

Pacific Century CyberWorks, which has won a $38 billion bid for Hong Kong's oldest telephone company, also said that its debt position after the alliance with Telstra would be reduced to $4.8 billion.

-- (The Wall Street Journal)