Orange May Buy 30 Percent of MobileOne, Paper Says (Update1)
quote.bloomberg.com
By Linus Chua
Singapore, Jan. 8 (Bloomberg) -- Orange Plc, Europe's No. 2 cell phone company, may buy 30 percent of Singapore's MobileOne Asia Pte., pitting it against a joint venture by Telstra Corp. and Pacific Century CyberWorks Ltd., the Straits Times reported.
U.K.'s Cable & Wirless Plc and CyberWorks in Hong Kong jointly own the estimated S$1 billion ($578 million) stake in MobileOne or M1, Singapore's second-biggest cell phone company. They must sell the holdings together. CyberWorks, too, is hoping to buy the stake for its Telstra joint venture to create an Asian network. Merrill Lynch & Co. is handling the sale.
Chua Swee Kiat, an M1 spokesman, declined comment on what he calls a ``shareholders' issue.'' Officials at the other companies, including Orange's parent France Telecom SA, couldn't be reached for comment.
``This could be part of France Telecom's global strategy and Orange certainly has something to offer being the No. 2 in Europe,'' said Tjandra Kartika, an analyst at G.K. Goh Research Pte. in Singapore.
For Orange, the likely purchase of the M1 stake may help extend France Telecom's foothold in Asia. France Telecom has holdings in neighboring Indonesia and recently sealed a technical pact with Malaysia's Time Engineering Bhd.
Orange will use M1 as its base in Asia to offer cell phone services in the region riding on existing carriers' networks, the Straits Times daily reported without citing any sources.
Funding Concerns
Still, investors are concerned that France Telecom may have a hard time finding buyers when it offers at least 7 billion euros ($6.4 billion) of stock in Orange later this month to cut debt and finance expansion. France Telecom and other European rivals have borrowed $330 billion and spent more than $90 billion on wireless permits called 3G that will let them sell faster Internet access.
The cost of such networks in Singapore could add more debt for Orange. M1 needs about $1 billion to bid and roll out networks for 3G or faster services that enable instant downloads of large files such as video, analysts estimate. Singapore is auctioning four of these licenses in the second quarter.
``Cost will be an issue as they have to fund 3G in Singapore,'' Kartika said.
Orange and other potential bidders also need the approval of M1's two other shareholders, Singapore Press Holdings Ltd. and Keppel Telecommunications & Transportation Ltd. Both companies, which own the rest 70 percent of M1, have the first right of refusal on the 30 percent stake.
``We are talking to various telephone companies to explore strategic opportunities,'' said Heng Hock Mui, a Keppel spokeswoman. |
