BT's $120m injection makes intention Clear

By RICHARD BRADDELL

WELLINGTON - British Telecom will push its investment in Clear Communications close to three quarters of a billion dollars with the injection of $120 million or more to extend Clear's local fibre optic loops.

BT will provide more than $120 million this financial year, which ends in March, with more to come over the next three years provided the expansion meets performance targets.

Clear also revealed yesterday that BT had chipped in $40 million so it could secure international bandwidth rights on the Southern Cross cable that becomes operational between Australasia and the US this year.

The injections come after BT pumped in $170 million last August, shortly after it took outright control of Clear when it bought the 75 per cent held by three other shareholders.

"It signals that BT is being a very active rather than a passive owner of Clear," chief executive Tim Cullinane said yesterday.

"It's a signal that we are serious about our goal of becoming New Zealand's leading provider of online services to businesses."

BT's further affirmation of support comes soon after lengthy negotiations with Telstra about Clear's ownership ground to a halt in December.

Those negotiations are thought to have broken down after the two sides failed to agree on price, with a Telstra offer possibly in the order of $480 million falling well short of $600 million said to have been demanded by British Telecom.

But while negotiations have collapsed, telecommunications sources say that is unlikely to be the final word, particularly since BT is thought to be using Clear as a bargaining chip to boost its position in Australia.

Mr Cullinane declined to be drawn on Clear's ownership, instead reciting the "mantra" that it was a shareholder matter.

And while he said the cash would be used to push Clear's local network into the business districts in provincial centres as well as Auckland, Wellington and Christchurch, he said plans could not be detailed because Clear did not want to signal its commercial strategy and because Resource Management Act and similar consents were still needed.