Managers seek Clear path

By RICHARD BRADDELL

Clear Communications' management is reportedly drumming up money to buy out British Telecom, which wants to quit businesses outside Europe and Japan.

British Telecom has not said what it wants to do with Clear, now New Zealand's third-largest telecommunications company, but Clear chief executive Peter Kaliaropoulos was in Hong Kong and Australia last week to look for financial backing, said an Asian source.

Mr Kaliaropoulos told the Business Herald that shareholder issues were a matter for British Telecom.

"However, should BT decide to change the company's shareholding structure, it would be prudent for Clear to explore all options."

Although Clear lost $30 million last financial year, a buyout is unlikely to come cheap since British Telecom will want to recoup as much as possible of the $600 million or more it has invested.

Mr Kaliaropoulos' managers are believed to be keen on the buyout, encouraged by what they see as a positive outlook for the economy.

But a buyout could prove challenging. British Telecom is believed to have rejected a $600 million offer from Telstra.

And while the soggy market for telecommunications stocks may make British Telecom more accommodating on price, Clear faces an increasingly competitive market - one that will be dominated by Telecom and Telstra Saturn with strengthening transtasman operations.

Big capital demands lie ahead as the industry evolves and the network continues to expand.

British Telecom's global refocusing, spurred by its urgent need to reduce debt, has raised speculation about its financial commitment to Clear, with suggestions that it may be forced to pay for investments such as third-generation mobile spectrum licences out of cashflow.

Clear's business is in the midst of change.

Mr Kaliaropoulos, who took over in September, has already set up a marketing and sales structure with annual revenue growth of more than 20 per cent as its target, taking it to $500 million in two years.

"Rather than being distracted by speculation about shareholding developments, Clear's management team will remain focused on the company's growth," he said yesterday.

"We believe the company has a bright future, potentially enhanced by a more competitive environment if the framework proposed for the industry by the telecommunications inquiry is introduced next year."

Mr Kaliaropoulos said last month that a three-fold increase on this financial year's profit was expected in 2002.

After suffering its first loss in the past financial year, Clear is trading profitably after the capital injection from British Telecom.