Hutchison Telecommunications Australia Ltd. has signed a MOU (Memorandum of Understanding) with Vodafone Pacific Ltd. which will come into effect if the latter succeeds in buying part of Australia's second-largest telecommunications company Cable & Wireless Optus Ltd. (CWO), which is up for sale.
Under the arrangement, Vodafone would transfer 1 million former CWO mobile customers to Hutchison, which is a unit of Hong Kong-based conglomerate Hutchison Whampoa Ltd. It would also give Hutchison access to its network and services to enable these customers to carry on using the services without disruption, according to the statement.
Hutchison, which operates the Orange brand in Australia, currently has 400,000 subscribers in Australia, the company said.
For Hutchison, the fast acquisition of customers would enable it to compete effectively on a national basis sooner than would be possible under an incremental growth strategy, Hutchison said in a statement to the Australian Stock Exchange (ASX) Thursday.
For Vodafone, the divestment of mobile customers may ease anticipated opposition from the Australian Competition and Consumer Commission (ACCC). If Vodafone took over CWO's mobile business along with all its subscribers, it would have more than 50 percent of the Australian mobile market, and ACCC has already promised to object to such dominance.
Vodafone is one of a number of carriers circling the assets of CWO, which has been put up for sale by its parent Cable & Wireless PLC, which owns 52.5 percent of CWO.
CWO, in a separate statement to the ASX late Thursday, confirmed that it had received expressions of interest from "a number of parties" in relation to its ongoing strategic review. On the basis of these proposals, the process will continue and discussions with the various parties progress, CWO said in the statement.
Other companies known to be eyeing CWO are Singapore Telecommunications Ltd. (SingTel), and Telecom Corp. of New Zealand Ltd.
Hutchison Australia can be found online at http://www.hutchison.com.au. CWO can be reached at +61-2-9342-7846 or via the Web at http://www.cwo.com.au.