Telstra-PCCW/Singapore M1 -4: Offer May Not Be Lucrative
(MORE) DOW JONES NEWS 04-05-01
04:02 AM
Bd Has Expressed Interest
SINGAPORE (Dow Jones)--Regional Wireless, a 60:40 joint venture between Australia's Telstra Corp. (TLS) and Hong Kong's Pacific Century (Singapore: PCEN.SI - news) CyberWorks Ltd. (PCW) is likely to bid for Singapore's MobileOne Pte. Ltd., or M1.
The board of Regional Wireless "has expressed interest" in bidding for the island-state's second largest telecommunications operator, a PCCW executive told Dow Jones Newswires on condition of anonymity.
(MORE) Dow Jones Newswires 05-04-01
0824GMT Confirmation No Surprise
M1's four shareholders Thursday said they may sell their stakes in the mobile phone operator, adding the discussions "may result in the joint disposal" of their holdings.
The shareholders include blue-chips Singapore Press Holdings Ltd. (P.SPH (Singapore: SPRMsb.SI - news)), Keppel Telecommunications & Transportation Ltd. (P.KTT), Britain's Cable & Wireless PLC (CWP) and PCCW.
The confirmation of Regional Wireless' interest in M1 doesn't come as a surprise, though SPH and Keppel T&T shares rose as it would yield a windfall for the two companies.
The joint venture is considered a natural candidate for M1 because Telstra has been targeting such Asian mobile assets, and PCCW already owns 15% of M1, analysts said.
At 0839 GMT (4:39 a.m. EDT), shares of Keppel T&T were up 35% at 97.50 Singapore cents, while SPH was up 4.5% to S$21.
Another player in the scene also confirmed the news.
"The board of Regional Wireless has shown interest in M1 and intends to bid for it," Michelle Au, a spokeswoman from Hong Kong CSL Ltd., a mobile unit of Regional Wireless told Dow Jones Newswires from Hong Kong.
"Regional Wireless has always shown interest in regional mobile development," she said, adding that while Regional Wireless' current operation is restricted in Hong Kong, it is "definitely looking around for opportunities in the region."
Regional Wireless "has always shown interest in Singapore," she said, but declined to provide more details on the potential bid for M1.
(MORE) Dow Jones Newswires 05-04-01
0900GMT Offer May Not Be Lucrative
Also confirming Regional Wireless' interest in M1, CSL Ltd.'s Chief Executive Officer Hubert Ng told Dow Jones Newswires that "on and off there should be discussions" among Keppel T&T, SPH, Telstra and PCCW.
"The interested parties should talk (to each other)," he said.
Ng said it appears that both Keppel T&T and SPH want to divest their entire stakes in M1 "as soon as possible" and that he doesn't think it will take a long time for the deal to be completed.
Commenting on Singapore's mobile market, Ng said the market may seem highly penetrated from a local operator's view point. But he said that as a pan-Asian player, Regional Wireless "may have a different view" and may look at its future growth through M1 from a regional perspective.
Singapore has a mobile penetration rate of 63%, according to Michael Millar, an analyst at SG Securities.
M1 has more than 800,000 mobile phone subscribers in Singapore and recently began offering long-distance fixed line services also.
However, some analysts said declining valuations of telecom companies worldwide and a saturated Singapore market may prevent M1's existing shareholders from fetching a lucrative offer from Regional Wireless.
Analysts estimated M1 to be valued between S$2 billion (US$1=S$1.8074) and S$3 billion.
Given the negative market conditions for telecom companies, "it is more like a buyers' market," said SG's Millar.
-By Shen Hong, Dow Jones Newswires; 65-421-4822; hong.shen@dowjones.com
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