Optus seeks equity ally

SYDNEY - After months of denials, Cable & Wireless Optus will seek an equity partner to expand its satellite network and cut costs.

Australia's second-largest telecommunications company says it needs additional capacity and access to more satellites "to remain internationally competitive ... over the longer term, both domestically and in the Asia-Pacific region."

Optus owns five satellites, including a yet-to-be launched C1 satellite co-owned by the Australian Defence Force. The satellite division is valued at about $A1 billion, according to a report in the Australian newspaper.

Merrill Lynch is helping Optus to find a partner, with potential buyers including the Hague-based New Skies Satellites; PanAmSat, owned by General Motors and based in Greenwich, Connecticut; and Hong-Kong-based Asia Satellite Telecommunications Holdings.

Optus did not say yesterday when the sale or agreement with a new partner would be completed.

London-based Cable & Wireless owns 53 per cent of Optus.

On September 15, the company said it would consider selling parts of Optus but for months it has denied it will sell its mobile business, which accounts for most of the company's market capitalisation.

Optus shares rose 6c to 381Ac.