Telstra rules out solo bid at Singapore 3G auction

date: 11November 2000

Australia's Telstra Corp is interested in expanding into the Singapore mobile-telephone market but rules out bidding alone for third-generation (3G) spectrum in the Singapore auction.

Telstra also said on Monday it had not had any formal talks with British Telecommunications about acquiring its Asian mobile phone assets.

The 51 per cent government-owned carrier, yet to sign its mobile joint-venture agreement with Hong Kong-based Pacific Century CyberWorks, said it was still in talks with Singapore mobile-phone company Mobile One (M1). Singapore said recently it would auction four new licences for 3G mobile-phone services, including Internet access and video conferencing, with the market estimating it could reap S$2 billion (about HK$8.88 billion) to S$4 billion.

The auction will take place in February.

Asked if Telstra would bid in the Singapore 3G auction, spokesman Trevor Dalziel said: "Well, not in our own right." He said it was common knowledge that CyberWorks' mobile unit, Hongkong Telecom (HKT), the main asset of the mobile joint venture with CyberWorks, was interested in bidding.

"I think it is common knowledge that Hongkong Telecom is interested. Until we have signed the final documents it is not our position to bid," Mr Dalziel said.

CyberWorks acquired the mobile company in a multi-billion dollar cash and scrip deal from Cable & Wireless (C&W), which once owned just over half of HKT.

CyberWorks and C&W have 15 per cent each of M1.

But Dick Simpson, group managing director of Telstra On-Air, recently said that talks with C&W on its M1 stake were "prickly". The talks continue however, Mr Dalziel said.

"The negotiations will come down to price," he said.

Telstra will own 60 per cent of its new mobile joint venture with CyberWorks, Regional Wireless, with documents expected to be signed before the end of the March quarter next year.

C&W still holds 15.3 per cent of CyberWorks, which has had its share price slashed in the international technology stock rout and after concerns over the revised structure of the deal with Telstra and the debt being carried by CyberWorks.

C&W must hold its CyberWorks stake until February. Sixty per cent of the value of the stake has been eroded.

Telstra shares closed up 11 Australian cents, or 1.8 per cent, at A$6.21, still well off their high this year of A$8.78, touched in March, while CyberWorks shares closed up five HK cents at HK$6.05.

Keppel T&T and Singapore Press Holdings each hold 35 per cent of M1. Telstra has a non-mobile joint venture, Data One, with Keppel in Singapore.

"There would not be any bidding for 3G through that Keppel joint venture," Mr Dalziel insisted.

Since BT confirmed on October 22 that it was reviewing various options and it would not rule anything in or out at this stage, speculation has being mounting on potential buyers.

"We haven't had formal discussions with BT over its Asian mobile properties," Mr Dalziel said.

Asked if there had been informal talks, he said: "I don't know if there has been that. We are talking to telecommunications companies around the world all the time."

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