Telecom $1.2bn Hutchison deal tipped

Telecom is believed to be considering a $A1 billion ($1.22 billion) equity investment in a separate third-generation wireless vehicle that would be spun off from Hutchison Telecommunications, reports the Australian Financial Review.

Hutchison has already created a firm for the stand-alone entity, Hutchison 3G Australia Holdings, which it registered at the end of last month.

The newspaper said it believed that talks between the companies were being handled in Hong Kong by the telcos' management.

Frank Sixt, the finance director of Hutchison's parent, Hutchison Whampoa, who is also the deputy chairman of the Australian group, said last week that discussions with Telecom were continuing.

"I would be surprised if at the end of our efforts there would not be any reward," he said.

Telecom declined to comment on the discussions but it has previously declared its desire to expand into a large-scale mobile operation in Australia.

Last week, Telecom announced a $A125 million writedown as a result of canning its new mobile phone technology rollout at its Australian subsidiary AAPT.

- NZPA