Singapore Telecommunications Ltd (SingTel) is holding negotiations with the Australian government on folding the company’s Optus fixed-line assets into a planned national broadband network in Australia.
Reportedly SingTel wants as much as 30% of the broadband-network company that is being founded by the Australian government. The Optus assets are valued at A$1.7 billion or US$1.4 billion, and the negotiations are expected to be finalized in November.
Optus is SingTel’s subsidiary in Australia, which initially had tsrived to build the broadband network as part of a consortium.
But the government said in April that it would scrap the tender process and instead plans to back the A$43 billion high-speed network with investments from the private sector. The global financial crisis dashed hopes of a single private company completing the project.
The private sector can hold as much as 49% of the new company, though there could be limits on individual holdings.
The comments came after the Australian newspaper reported over the weekend that a possible sale of Optus’s cable assets into the planned network could be the first step toward relisting the company in Australia.
Optus is in a strong position and has a range of options available to it, SingTel said, and the company will not comment on market speculation.
Analysts said a potential sale of SingTel’s Optus fixed-line assets would allow the telecommunications operator to get a foothold into Australia’s broadband program and allow the company to raise funds to help Indian associate Bharti Airtel Ltd. in its bid to merge with South African mobile operator MTN Group Ltd.
Besides, analysts also expect Australia’s dominant phone company, Telstra Corp, to sell parts of its fixed-line network into the national broadband network, although many expect to see a battle between the telecom operator and the government over the network’s pricing.
Buying existing infrastructure will give the planned network a large, immediate footprint, which could help reduce overall construction costs, analysts have said.
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