Singapore Telecommunications Limited (SGX:Z74) says it wants to sell part of Optus (Singtel Optus Pty Limited) just days after the communications regulator hiked spectrum prices, triggering a multibillion-dollar Treasury windfall and industry-wide fury. Singtel told the Singapore stock exchange that it was actively seeking a minority partner to buy into Optus, ending its 25-year stranglehold on sole ownership of Australia's second biggest telecommunications carrier. The willingness to sell a "minority stake", comes as Optus is fighting to recover from a string of reputational crises in the past three years, including a cyber attack, national outage, deaths linked to triple-zero failures, and selling mobile plans to people it knew couldn't afford them.
"The group is open to working with potential Australian partners that align with its objectives of ensuring that Optus continues to be a strong alternative operator in the industry, providing a reliable and trusted critical service to all Australians," Singtel said. "Singtel contemplates a like-minded long-term local partner owning a meaningful minority stake in Optus." The Australian Communications and Media Authority this week confirmed it would charge carriers $7.3 billion to renew their existing licences for mobile spectrum, the frequencies used by carriers to carry calls and data. Optus said the new valuation was a "very challenging outcome" for the industry at large.
"The result is pricing that does not align with the economic realities of operating networks in Australia and increases the risk that capital is diverted away from investment in network capacity, reliability, resilience, security and coverage," a spokeswoman said. Optus' submission to ACMA argues the total industry bill for spectrum renewals should have been closer to $4.8 billion, based on its own modelling. Singtel has been mulling a sale for some time.
Two years ago, there was talk that Optus could be partially offloaded to Canadian private equity titan Brookfield in a deal that would have valued the telco at $16 billion.
