Telecom Delays Mobile Phone Network Until March
Wellington, Dec. 21 (Bloomberg) -- Telecom Corp., the nation's dominant phone company, said it will delay developing a mobile phone network in Australia until at least March.
The company, which will have a code division multiple access mobile service operating in New Zealand next year, said its Australian unit is reviewing terms of the contract to build the network with contractor Lucent Technologies Inc.
Last week Telecom disclosed it is a bidder for the $6.2 billion mobile assets of Cable & Wireless Optus Ltd., Australia's No. 2 phone business. That sale, which has also attracted Singapore Telecommunications Ltd. and Vodafone Plc, is expected to be completed in the first quarter next year.
The Australian network delay is ``related to Optus,'' said Stephen Walker, who manages about NZ$1.6 billion worth of shares for AMP Henderson Global Investors New Zealand Ltd.
Lucent is a provider of many different technologies and Telecom would be a much bigger customer if it acquires Optus's mobile assets, Walker said.
When it announced its first quarter results in November, Telecom said developing the CDMA network in Australia was slower than planned, and a start in selected areas was expected in the second half of 2001 rather than by late 2000.
The reasons for the delay ``remain confidential to the parties,'' said Telecom spokesman Martin Freeth. Telecom earlier this year acquired 100 percent of AAPT Ltd., Australia's No. 4 phone company.
``The review and suspension until next March follows delays in the roll-out,'' said Mohan Jesudason, head of Telecom's mobile operations, in a statement.
``During the period of review, we have mutually committed to exploring all the options open to us in the context of the fast evolving Australian mobile market,'' Jesudason said. AAPT and Lucent also have ``commercial matters'' to resolve, he said.
Lucent won contracts to supply AAPT Ltd. and Telecom in February in two contracts worth A$450 million ($250 million) and NZ$200 million ($110 million) respectively. Both contracts are for mobile-phone equipment based on Qualcomm Inc.'s CDMA standard.
Telecom fell 20 cents, or 3.9 percent, to NZ$5.
Dec/21/2000 0:31 ET
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