Telecom's mobile mystery continues

By Phil Boeyen, ShareChat Business News Editor

Thursday 15th March 2001

Speculation over Telecom's (NZSE: TEL) mobile future in Australia is hotting up after its withdrawal from the radio spectrum auction there.

The auction for six licences for third generation (3G) spectrum begins today, and Telecom's subsidiary AAPT had paid a bond of $137.5 million to be in the running, along with Telstra, C&W Optus, Vodafone, and Hutchison and two US companies.

Telecom spokesman Martin Freeth says now that the company has pulled out of the auction the bond will be repaid, although it will forfeit a $50,000 registration fee.

The company says it will continue to assess strategic opportunities for an expanded presence in the Australian mobile market and its decision in respect of the auction is not inconsistent with this.

TEL has spoken to a number of mobile operators in Australia but isn't saying who.

"As indicated previously, Telecom is talking about opportunities with various parties. The company will not identify those parties or comment on the substance of discussions at this stage," Telecom says in a statement.

Late last year Telecom suspended the rollout of AAPT's CDMA mobile network in Australia, raising speculation that the network would not be needed if it bought the mobile assets of another company, such as C&W Optus.

However Telecom is ranked the outside chance for the Optus assets, leading the market to guess which other companies it could partner with.

The question has also been asked if AAPT would be content with remaining a reseller of other mobile networks, although this is probably a plan of last choice.

"We would prefer to be a network operator although we are considering all the options," says Martin Freeth.

Australian media reports claim Telecom has been in talks with Hutchison about forming a national mobile phone network using CDMA technology.

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