Telecom reportedly mulling the sale of AAPT

Telecom is mulling the sale of its Australian operation AAPT or alternatively pursuing an alliance, an unsourced Australian Financial Review story said today.

Telecom officials were not immediately available to comment.

AFR said Telecom had been prompted into the review of AAPT by Telstra's strategic review of its wholesaling operation.

"Telecom NZ has been reviewing the future of Australia's third largest teleco group, AAPT, because of the move by Telstra chief executive Sol Trujillo to downgrade the importance of the Telstra wholesale division as part of its strategic review of the company," AFR reported.

The story said Citigroup had been providing Telecom with advice on AAPT.

Telecom bought an initial stake in AAPT in 1999 at the height of the telcom boom.

It eventually bought out the entire company for around A$1.5 billion ($1.7 billion). AAPT has been a financial drag on the company ever since.

Telecom relaunched AAPT two years ago in an attempt to revive its mobile, internet and telephony services under the brands Smartmobile, Smartinternet and Smartchat.

In the most recent quarter, the unit still showed itself to be a laggard with total revenue declining 1.2 per cent to A$601 million ($679 million) as it faced "intense price competition across most product lines".

After closing yesterday on $5.94, Telecom shares rose 11c in early trading today to $6.05.

- NZPA