Mobile network rollout winds up

Telecom's Australian subsidiary AAPT has agreed to can the rollout of its long-awaited CDMA mobile network in Australia.

Telecom and Lucent Technologies say changes in the Australian mobile communications market caused them to stop the rollout of the Code Division Multiple Access (CDMA) mobile network.

"AAPT and Lucent undertook a comprehensive mutual review of the project since the agreement to suspend the rollout was decided last December and have now agreed to wind up the rollout," Telecom's general manager of mobile, Mohan Jesudason, told the stock exchange.

AAPT had spent more than $A125 million ($154 million) on the CDMA rollout to the end of December, he said. The extent of the write-off would be known in "due course."

Mr Jesudason said the agreement with Lucent Technologies provided the basis for an efficient winding-up of the CDMA project.

A Telecom spokeswoman said the company would not comment on any details of that agreement, including any penalty payments. AAPT and Lucent said that they would continue to have a close working relationship and discussing future opportunities.

Lucent Technologies chief executive for Australia and New Zealand Phil Pryke said Lucent was having talks with Telecom on other business opportunities, and the companies continued to maintain a strong relationship.

"We are continuing to work with Telecom on the CDMA rollout in New Zealand," he said. "The project is clearly a milestone for both Telecom and Lucent.

Telecom's CDMA network in New Zealand is scheduled for commercial launch in a few months.

Telecom took control of 100 per cent of AAPT, Australia's third-ranked telco, last year.

Telecom said early last month that it remained committed to increasing its presence in the Australian mobile phone market.

Telecom shares reacted quickly to the news, falling 20c to $6.20 just after 3 pm and did not recover before the end of the day's trading.

- NZPA