HKT's international unit PCCW Global could be headed for the sale block.
The company owned by Richard Li, the son of tycoon Li Kashing, is weighing a number of options, including sale, Bloomberg reports.
The business, which operates a Tier 1 global Internet backbone with 125 PoPs, is worth approximately $1 billion.
However, sources tell Bloomberg and local newspaper Apple Daily that the process is at a very early stage.
News of the possible sell-off sparked a spike in the HKT stock when the story broke Wednesday, but sentiment cooled Thursday with the shares down 2.36% to HK$11.60 (US$1.50).
Local rival Hutchison Telecom, owned by the older Li, disposed of its global network division to New York private equity firm I Squared two and a half years ago.
Richard Li's thinking is no doubt similar to his father's.
HKT's business is now primarily in mobile, enterprise and media, and that's where it is growing.
The global Internet capacity market – apart from being dominated by OTT players like Facebook and Google – is a low-margin, price-driven business. It requires an owner with global scale and focus.
According to HKT, PCCW Global is frequently ranked as one of the world's top ten IP traffic carriers, but it lacks the scale.
PCCW Global has its attractive features, with links to 76 cities and a share of 60 subsea cables. It also offers a cloud interconnection platform, Console Connect, that provides on-demand access to cloud services and applications.
HKT's spokesperson would not comment on the report.
This is not Li's first effort to offload his international capacity business, though.
Not long after he acquired what was then Hong Kong Telecom in a heavily leveraged deal in 2000, he spun off the international networks into a joint venture with Telstra called Reach.
But the JV, conceived at the height of the bandwidth bubble in 2000, never attracted the level of business expected and was eventually folded into Telstra.
— Robert Clark, contributing editor, special to Light Reading