Telecom joins DoCoMo in bid for Optus networks

Telecom and Japan's NTT DoCoMo are expected to meet executives from Cable & Wireless Optus this week to discuss ways the two companies can acquire the mobile and broadband networks of Optus.

Executives from DoCoMo and Japanese broking house Nomura Securities, a financial adviser to Telecom, were believed to have scheduled a meeting with Optus.

Given it is the initial meeting between the parties, no deal is expected for at least a few months, the Sydney Morning Herald reported.

Nomura would also be a financier to Telecom if a deal emerged, as the New Zealand carrier does not have the balance sheet to buy any of Optus' major assets on its own.

DoCoMo and Telecom are working together under a codename, Project 20-20, to buy the Optus assets, which are on the block following a review of the company by its 52 per cent shareholder, Cable & Wireless plc of Britain.

The Australian media reported that last Friday was the deadline for expressions of interest in the $A20 billion-plus ($26 billion) selloff of Optus' mobile, consumer and some corporate data assets.

Telecom has been billed as a leading contender for the $A12 billion of mobile assets, in tandem with DoCoMo, Japan's largest company.

The Australian Financial Review speculated that the Telecom-DoCoMo proposal was to control 40 per cent and 20 per cent of the wireless asset respectively, with the balance to be sold in a public float.

Any deal between DoCoMo, Telecom NZ and Optus was likely to be in the form of a scheme of arrangement, which would have to be approved by Optus shareholders, rather than a hostile or agreed takeover. The two companies would have to win the consent of Optus' parent Cable & Wireless, which is seeking to keep the data and business operations of Optus.

The Sydney Morning Herald said DoCoMo's aim to own only about 20 per cent of the Optus mobile business fitted its strategy of acquiring minority shares in mobile companies. DoCoMo owns about 19 per cent of the mobile operations of Hutchison Whampoa, and 15 per cent of the mobile business of Dutch telecom group KPN.

- NZPA