New Zealand's largest listed company, Telecom, said it will receive formal proposals from potential buyers for its Australian business over the next month and aims to decide on the unit's future by May 5.
Telecom said Australia's second-biggest phone company Optus, owned by Singapore Telecommunications Ltd, was among trade and
financial buyers who had expressed interest in the unit which made up about a quarter of group revenues in fiscal 2005.
Telecom last month more than halved the book value of its Australian operation -- which includes third-ranked AAPT Pty Ltd -- to A$628 million ($734.83 million), citing falling retail prices and rising wholesale charges.
Marko Bogoievski, Telecom's chief financial officer, said on Wednesday retaining all or part of the unit were still the most likely options, rather than a full sale.
"Over the next month we expect people to table their propositions," Mr Bogoievski told Reuters in an interview.
"Optus have already, in the last few months, confirmed they have an interest."
He said Telecom, advised by Citigroup, expected to decide on the unit's future by May 5, when the group is due to report its third-quarter results.
Speaking from Sydney, where he briefed analysts on the review process on Monday, Mr Bogoievski said Telecom did not want to split the unit up.
"We have made it clear one of the other bottom lines we'd like people to think about is our Trans-Tasman capabilities. We've got large corporate customers who have needs in both New Zealand and Australia. Regardless of this process and the review, we are going to have to service those customers."
Mr Bogoievski declined to name other potential trade buyers or partners but analysts have said they might include the Australian arm of Britain's Vodafone and third-tier carriers such as Primus Telecommunications and Commander Communications Ltd.
Core earnings at Telecom's Australian operations in the second-quarter ended December 31, were down nearly 60 per cent from the same period a year ago to A$17 million, and margins halved in the same period, as a result of a squeeze on Australian retail prices and rising charges to access the network of top company Telstra Corp Ltd.
Mr Bogoievski said in February he expected revenue growth of 3-6 per cent at the Australian business over the longer term.
Telecom shares were trading up 3c at $5.30 by early afternoon.
- REUTERS
