The multimedia venture, 60%-owned by HKT and 40% by Star TV, had planned to deliver high-speed Internet access, video-on-demand and 50 pay-TV channels using Star TV's content and HKT's broadband network.
"We have come to a mutual and amicable decision to part ways," the companies said in a joint statement.
There was little surprise in their decision. Last week, Star TV let it be known publicly that the two companies faced major disagreements about costs.
Also, industry insiders have speculated about a likely split since Cable & Wireless agreed to be bought by Pacific Century CyberWorks (PCCW) last February.
PCCW, run by Chairman Richard Li, is developing its own pan-Asian broadband Internet service, Network of the World (NOW), which clearly crossed wires with the plans of the C&W/Star TV joint venture.
Mr. Li has tangled with News Corp. before. The 33-year-old scion of Hong Kong tycoon Li Ka-shing founded Star TV in Hong Kong in 1990 and sold it to News Corp. for $950 million in two separate deals in 1993 and 1995.
News Corp. Chairman Rupert Murdoch, meanwhile, vehemently backed a bid by Singapore Telecommunications for HKT, which was defeated by PCCW last February.
In a separate statement June 2, Star TV announced the appointment of MindShare as a global media consultant to provide media planning, buying and consulting services across Asia-Pacific, Europe and North America for all Star TV channels, with immediate effect.
MindShare, which claims to manage more than $17 billion in global media investments for marketers including Unilever, IBM, American Express, Ford, Nike, Pepsi and Sony, also provides media consultancy services to other News Corp. companies, including News Limited in Australia and Twentieth Century Fox in the U.S.
Copyright June 2000, Crain Communications Inc.