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July 7, 1997
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Cable & Wireless Ups Stake In Australia's #2 Telecom Carrier To 49 Percent
Cable & Wireless has agreed to pay Bell South Corp. $730 million for its 24.5 percent stake in Optus Communications Pty. Ltd., Australia's second largest telecom carrier. The purchase of 490 million Optus shares pushes U.K.-based Cable & Wireless's stake in Optus to 49 percent and gives it immediate management control, sources said.
As part of the purchase, Cable & Wireless received options that, if exercised, would increase the company's stake to 52 percent. Although Australian law forbids foreign ownership of a local telecom carrier, insiders say the rule will be waived.
Optus competes against Telstra, Australia's national telecom carrier, which is expected to go public later this year. Since starting five years ago, Optus has bagged 1.9 million long-distance customers (about 18 percent of the market). The company is strongest in the mobile phone market, with about 32 percent of market share. Additionally, Optus has made inroads in cable TV, with more than 180,000 customers. |
