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Telecom's Australian subsidiary AAPT is understood to be in merger talks with Sydney-based network company PowerTel.
Telecom already has an agreement with PowerTel, signed in November, under which AAPT offers its business and residential customers a range of high-speed broadband and access services.
The New Zealand Herald said today it was now understood the New Zealand telco was negotiating to buy a blocking stake in PowerTel in order to deflect a takeover bid from Optus.
PowerTel has the second largest fixed-line broadband network in Australia, after Telstra, and mainly provides wholesale data, fixed-line voice and internet services.
Australian-based ABN Amro telecommunications analyst Ian Martin told the newspaper Optus could make a bid for PowerTel to prevent PowerTel and AAPT merging and becoming a significant third retail fixed phone line provider.
The combination of PowerTel -- with a large network capacity -- and AAPT's retail business would challenge the position of Optus, he said.
Any move by AAPT to take a blocking stake in PowerTel would be sensible, he said.
"That would give them some negotiating position if Optus did bid for PowerTel. They would certainly have a seat at the table if there was any consolidation."
- NZPA
