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No bid result this week, says Optus

SYDNEY, Australia -- Cable & Wireless Optus expects indicative bids this week for its $8 billion-plus telecoms business from potential buyers that include Vodafone Pacific.

But Optus, Australia's second largest telco behind Telstra, said there would be no "conclusive outcome" immediately, and the bids were part of a continuing process of its strategic review.

Optus is owned 53 percent by London-based Cable & Wireless, which wants to sell some or all of the three Optus business units - mobile; data and business; and consumer/multimedia.

Optus head of mobiles, Paul O'Sullivan, confirmed Wednesday that Vodafone was one of the interested parties talking to Optus. Others are understood to be Singapore Telecommunications and Telecom New Zealand.

Concerns over competition

Vodafone, the third-largest mobile operator in Australia, must first convince the Australian Competition and Consumer Commission that its possible acquisition of the Optus business would not harm consumers.

A merger would leave the two companies with 53 percent of the mobile market, while Telstra has about 44 percent.

Vodafone believes it can satisfy the competition regulator's concerns by divesting parts of a combined Vodafone/Optus business.

O'Sullivan said there were two levels of potential bidders for the Optus business. One level was "highly involved in discussions" while others at the second level were waiting to see how things developed.

"It is true indicative offers are due this week - that has always been the case," he said.

But O'Sullivan stressed that there would be no immediate outcome; the process would "pass through a gate" and move to the next stage.

SingTel seen as another likely bidder

Along with Vodafone, Singapore Telecom is regarded as among the most likely bidders for Optus. A SingTel spokesman said the telco was eyeing investment opportunities in Asia Pacific, but would not comment on specific companies.

The seventh-largest regional telecom is known to have more than $2.75 billion available for a purchase, and SingTel chief executive Lee Hsien Yang has already stated his strong desire to turn the company into a major regional player.

O'Sullivan also said that Optus and market leader Telstra were the best placed Australian telcos to roll out third-generation wireless mobile services, and so were "natural participants" in the Australian 3G spectrum auction next month.

But he said Optus would only bid for spectrum at a price that it regarded as delivering value to shareholders and consumers. O'Sullivan said Optus was gaining ground on Telstra in terms of subscriber numbers and revenue. At the end of 2000, the number of Optus users was 72.5 per cent of Telstra's.

"In the next three to five years, we are looking at closing that gap," he said.

One opportunity for Optus to get closer to Telstra's market size would come in September, when mobile number portability is to be introduced to the Australian market.

"Telstra stands to lose the most in mobile number portability because of its dominant position in the corporate and business market. So MNP (portability) represents a huge opportunity for us," he said.

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RELATED SITES:

C&W Optus
Vodafone Pacific
Telecom New Zealand
Singapore Telecom

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