Telecom Mum on Aussie Plans

Telecom has missed out on its bid for the mobile division of Cable & Wireless Optus after Vodafone withdrew leaving SingTel as the new owner of the broadband, mobile and internet assets.

In the largest deal in Australian corporate history SingTel will buy the assets for $A17.2 billion although it may take up to four months to conclude the details.

Telecom however has a few moves up its sleeve with plans to sell off some of its assets and to achieve a greater trans-Tasman presence but doesnt want to give away its strategy. It confirms it’ll grow in Australia through acquisitions and alliances.

Telecom chief executive Theresa Gattung isn’t deterred. “Telecom continues to be well positioned to benefit from the anticipated rationalisation of telecommunications in Australia.”

While it had been interested in acquiring C&W Optus assets she says Telecom will only ever participate in transactions that enhance value its shareholders.

Telecom was up against Singapore Telecom (SingTel) and Vodafone Pacific. Telecom and Vodafone only wanted the mobile side of the business while Cable & Wireless was keen to see the entire assets of its 52 per cent owned Australian operation change hands.

At the deadline for offers on March 9th SingTel, 78 per cent owned by the Singapore government, looked an easy winner. However both Vodafone, with an existing 18 per cent share of the Australian mobile market, and Telecom registered revised bids.

It was thought last week that Telecom may end up owning Hutchison Telecommunications’ Orange One mobile network in a trade off deal to please the Australian Consumer Commission (ACCC), if Vodafone continued bidding.

Vodafone pulled out late last week claiming it couldn’t make the figures work. Now speculation is moving back to what Telecom New Zealand’s next move might be. After the suggested deal to acquire some of Hutchisons’ customers its believed talks may continue in that direction.

Hutchison has 3G spectrum and both companies have complementary spectrum in the 800 Mhz mobile band.

Telecom’s wholly owned Australian subsidiary AAPT had previously pulled out of last weeks Australian 3G spectrum auction before it got under way, indicating it’s talking with various parties about other options.

Telecom already owns a 300,000 mobile subscriber base through its control of AAPT and although it recently backed off plans to invest $A125 million in a new second generation CDMA network in Australia.

There were six companies bidding for lots which the Australian government hoped would bring in $A2.5 billion. That projection ended up being short by a billion dollars with Telstra grabbing the lions share of mobile spectrum for around 30 percent less than its major rivals Optus and Vodafone.

Services from the new networks however may not be operational until 2004. Full auction details are available on a special Web site.

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