SingTel brings a grin to a 'father'
By MARK BAKER
Tuesday 27 March 2001
Lee Kuan Yew, Singapore's feisty elder statesman, has long had a father-knows-best view of Australia. A regular visitor always ready to give advice to our media and politicians, he once declared that Australia risked becoming the "white trash of Asia" unless it smartened up.
While Mr Lee is yet to declare his view on the $20 billion takeover of Cable & Wireless Optus by Singapore's national telecommunications carrier, SingTel, it can be reasonably assumed that the old man has a number of reasons to be well pleased that his country has stolen a corporate march on its southern neighbor.
This is a sweet victory for both Singapore Inc and Lee Inc.
For Singapore Inc - as locals refer to the big corporations that are largely controlled by the Singapore Government and contribute 60 per cent of gross domestic product - the deal means picking up a plum asset and reinforcing the government's aggressive strategy of regional economic expansion.
It also means a further advance in the broadening web of commercial interests in Australia, involving enterprises either wholly or substantially owned by the Singapore Government.
Singapore Airlines is expected to win a major stake in Ansett Airlines, Development Bank of Singapore has been eyeing Westpac and the Civil Aviation Authority of Singapore is seen as a frontrunner to take over Sydney Airport.
For Lee Inc - the family that continues to wield enormous influence over Singapore's political and corporate life - the Optus deal is a timely vindication of the skills of the new generation.
SingTel's chief executive, Lee Hsien Yang, the younger son of Lee Kuan Yew and the brother of Deputy Prime Minister Lee Hsien Loong, had been under growing pressure from the government and the company's shareholders to kick a goal in the tough league of Asian telecommunications.
Twice in the past year, Lee Hsien Yang had failed to expand SingTel's reach in the region and analysts feared that the reserved 43-year-old might not succeed in the new economy. SingTel's loss to Richard Li's Pacific Century Cyberworks in the battle for control of Hong Kong's biggest telecommunications company drew some unflattering comparisons between the dour Mr Lee and the brash and flamboyant Mr Li.
Questions were also raised over the wisdom of Lee Hsien Yang's subsequent ill-fated attempt to buy into Malaysia's Time dotCom. Even casual students of the brittle relationship between Malaysia and Singapore saw the improbability of the Mahathir Government agreeing to the deal.
But some resolute footwork in the contest for control of Optus has proved Mr Lee a winner. While shares in Hong Kong's PCCW have fallen by 80 per cent and Malaysia's Time dotCom has been a spectacular flop, SingTel posted a 27.3 per cent increase in profit in the three quarters to December, year on year.
The Australian acquisition will make the new entity Asia's biggest wireless carrier. And in an irony that will not be lost on many, the deal means that an important slice of Australia's telecommunications industry - privatised by Canberra - has essentially switched from the control of one government to another.
Despite assurances that the Singapore Government will reduce its present 78 per cent stake in SingTel, it appears that it will maintain at least 60 per cent of the shares. Lee Kuan Yew might well tell his old Australian friends: "I told you so."
This story was found at: theage.com.au |
