Vodafone in Bidding for Australian Mobile Operator

[London, ENGLAND] Having spent US $2.19 billion on
Japan Telecom and US $4 billion on Eircell already
this week, U.K. mobile operator Vodafone Group has
reportedly bid over US $10 billion for Australian
mobile operator C&W Optus.

53 percent owned by Britain’s Cable & Wireless,
C&W Optus has been inviting bids since September
and recently signed a $2 billion loan facility with
10 major domestic and international banks.

In a brief statement Friday, C&W Optus confirmed
that it has received “a number of serious expressions
of interest” in response to its September document.
The process, says the company, is still continuing,
and “all expressions of interest are confidential,
preliminary and indicative in nature.”

Clearly, Vodafone is not the only suitor for the
Australian company — and one newspaper suggested
a few weeks ago that there are around ten companies
interested in acquiring some or all of the assets of
C&W Optus. In November, Cable & Wireless
Chief Executive Graham Wallace made it known that
he wanted to retain the company’s Internet and data
businesses, although this may not now be a viable option.

Vodafone operates Australia’s third-largest mobile network
and the acquisition of C&W Optus would take it
ahead of market leader Telstra. Such a move would need
to be ratified by a skeptical trading authority which
wants to avoid letting a single company dominate the
mobile market.

For Vodafone Chief Executive Chris Gent, it’s all just
another day of Christmas shopping. Apart from Japan
Telecom, Eircell and C&W Optus, his company has
a joint venture with Verizon Communications —
Verizon Wireless — which has just bid US $3.47
billion in the U.S. spectrum auctions.

As former U.S. Senator Everett Dirksen said famously
some years ago: “A billion here, a billion there, sooner
or later it adds up to real money.”

The size of bank loans to the world’s telecommunications
industry are beginning to worry the markets, resulting
in the recent sharp fall in share prices of companies
such as BT and AT&T. Economists at the BBC
estimated this week that worldwide nearly US $600 billion
has been loaned for licenses, takeovers, and the expansion
of mobile and other operations.

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